Global trade temporarily on withdrawal

The corona-induced lockdown has led to serious macroeconomic losses worldwide. This has already been demonstrated by the sharp declines in gross domestic product in many regions. In view of this, the decline in global trade in goods between January and March was comparatively muted. One reason is also the strong regional differences in the course of the pandemic and the associated lockdown measures.
However, current data indicate that the low point in foreign trade has not yet been reached. Particularly in East Asia, figures for May show that the decline in foreign trade in goods has apparently intensified again. In particular, import activity from the important trading regions of the EU and the USA again declined significantly.
Similarly pessimistic signals are being sent out by global purchasing managers (PMI; J.P. Morgan Chase Bank/ IHS Markit) for May. According to these, two decisive problems for companies have not yet been resolved. Not only does the severely depressed demand remain considerably weakened. Many companies continue to report disruptions in their supply chains, which is slowing down production noticeably.
When an improvement in global trade activity can be expected depends, on the one hand, crucially on the intensity of the remaining restrictions on public life in the individual countries. On the other hand, uncertainty among consumers and investors must be gradually reduced again. The first measures in this direction have been taken, including extensive economic stimulus packages and generous credit guarantees in a large number of countries. This is now also reflected in a less pessimistic climate among companies and consumers.
Based on the available sentiment indicators, we expect a gradual recovery in global trade in goods from the second half of 2020 onwards. However, a marked increase in the direction of „normalization“ is unlikely to be expected in the coming months. Rather, we see a broad-based recovery that is likely to continue well into the coming year. For the time being, the corona virus will continue to dominate everyday economic and social life.

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