FOREIGN TRADE SHOWS SIGNS OF A REBOUND: 3 KEYS TO UNDERSTANDING EVERYTHING.
The foreign trade rebound started to be present in the worldwide scenario. Since March 2020, at Credit Report, we emphasized that the opportunity to continue with the imports and exports depended, above all, on targeting the most dynamic sectors as food, medical supplies, and finding suitable trading partners.
In accordance with the World Trade Organization (WTO), the most recent statistics in trade activities show a rebound among last June and July. So much so that the economists of the organization modified their perspectives about the economy fall which is expected to the end of 2020 and also the projected recovery for 2021.
Although, these new projections depend mostly on what happen with the new wave of worldwide infections due to COVID-19.
If, in your foreign trade company, they want to adjust the plans of imports or exports for the rest of this record-breaking year, we share below the three essential keys to understand this current scenario.
¿What did change in the projection of contraction in trade for this year 2020?
The projection made last April, when almost all Europe and Latin America were under a strict isolation at home, was that the foreign trade would collapse up to 12,9% by the end of the year.
Due to the government’s boost and the creation of the most efficient biosecurity systems in the tracking of patients infected with the new coronavirus, the scenario of the COVID-19 pandemic changed.
The first direct consequence is that it was awarded a major strength to the imports of the States in the sectors as medical inputs and this ended up to become in a force for all the worldwide trade.
After all, now the WTO estimates that the fall in the trade goods volume will be only of 9, 2% at the end of 2020. This, represents a reduction of almost four points in comparison to the previous scenario.
¿Which is the role of Asia in this commercial scenario’s improvement?
Asia, was the first region to face the infections with the new coronavirus and is also the region of the world where will be the least to be affected in its imports and its exports for the end of 2020.
The estimations of the WTO mark setbacks in all the regions worldwide: North America, South America and Central America, Europe and Oceania. Asia also will register red figures, but it will be the region with less pronounce declines all over the world.
Asia´ s imports are expected only to back down 4, 4%, while exports will have a downward of 4, 5%. That compares with South and Central America´s drop of 13, 5% in its imports as well as North America´s drop of 14, 7% in exports which are estimated for the end of the year.
¿How is projected the commercial recovery for 2021?
The WTO believes that the commercial recovery will be during 2021. However, it is cautious by pointing out the new total isolations in many countries.
Therefore, all scenario needs to consider the uncertainty about the new wave of infection. The Discovery of an effective treatment for the COVID-19 disease or the development of a vaccine remain as the two elements which may make an important change in the worldwide trade scenario.
The WTO economists estimate a foreign trade recovery of 7, 2% for the next year. This scenario is closer to “a weak recovery than a fast return to the previous trend” according to the latest report issued by the WTO.
In Credit Report, we believe that most of commercial companies can be part of this new recovery of the traded volumes in foreign trade. Although, we also know that to make commercial plans for 2021, requires reliable information to assess the context and identify the potential new customers in strategic zones.
Our experience of over 55 years in the analysis on foreign trade and our database with reports of companies in over 190 countries may be the key which help many companies to remain operative, increase their cash flow and extend business with partners in Asia. Contact Credit Report to know our plans customized to your commercial company.