“Longstanding downside risks” to trade outlook

The Hellenic Shipping News has published news about longstanding downside risks to the trade. The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.

But the OECD still predicts an uncertain outlook for the trade. Because many “longstanding downside risks” affect the global trade outlook. “Some of the distortionary barriers to trade introduced around the world over the past two years are still in place,” said the OECD. “Tariff and non-tariff barriers remain high, and continue to limit the global trade.”

After a 10.25% decline in 2020, the OECD projects will increase by an average of about 4.25% per annum over 2021-22. The OECD’s chief economist predicts that global GDP will reach pre-pandemic levels by the end of 2021. They predict that global GDP will grow by about 4.25% in 2021. It will also grow by more than 3.75% in 2022.

Ups and downs

According to the OECD’s upside scenario, the growth of world trade will be significantly strengthened. In 2022, it will increase by about 3.75% and boost exports in all economies. However, the upside scenario could see a significant reduction in global trade demand.

Its analysis shows that the UK’s no-deal exit from the EU market would hit activity in the near term. It also has a lot of negative effects. It would entail physical and financial disruptions of different magnitudes across sectors. Therefore, exports falls by more than 30% in a few manufacturing sectors. And it almost falls 20% in the financial and insurance sector.

Uneven recovery

According to Boone OECD projects that the recovery will be uneven across countries. It potentially leads to “lasting changes in the world economy.”

It is projected to be more than a third of the world’s economic growth in 2021. The OECD economies will rebound at 3.3% in 2021. But recovery only partially from the deep 2020 recession.

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