Credit rating company Moody’s predicts shrinking of global trade due to Coronavirus
The widely used credit rating company Moody’s Investors Service, on Wednesday, predicted that the
global trade will see a sharp decline in consumer demand and investment and
supply disruptions in the second half of the year. The predictions were
published in a study report - Global Trade Monitor – May 2020 that the company
The report stated that the trade across the world would contract between 13% and 32% in the coming months as a result of the Novel Coronavirus-induced lockdown in over 90 countries. This was because the countries have put a restriction on the export of medical products, food supplies, and other essential goods.
It also said that there are high chances that the ‘phase two’ trade negotiations between the United States and China; the United Kingdom and European Union; and the United States and European Union could be further delayed for various reasons. The report added the second strike by the virus could further complicate the situation.
However, the survey had a brighter point of view as well and stated that the regional supply chains in the auto and electronics sectors could accelerate and promote the domestic production of critical goods. It also emphasised on the development of concepts such as ‘work from near home’ and a boost in digital services due to the online working mechanism or work from home culture.