Covid-19 may cause deepest economic crisis ‘of our lifetimes’ — WTO chief

The coronavirus pandemic is likely to spark an unprecedented fall in global trade as well as an economic crisis rivaling the Great Depression, the head of the World Trade Organization (WTO) has warned.

“We confront what may well be the deepest economic downturn of our lifetimes,” the organization’s Director General Roberto Azevedo said in a grim forecast.

“Comparisons with the financial crisis of 2008 and even the Great Depression of the 1930s are inevitable.”

The international trade regulator has estimated that the global goods trade volume could shrink by 13 percent this year because of the pandemic even in the best-case scenario. Should governments around the world fail to bring the deadly virus under control any time soon, the world will stand to lose about a third of its total trade volume this year or even more.

International trade is already seeing what Azevedo described as “enormous” shocks in supply and demand caused by governments’ decision to limit trans-border movements and restrict economic activities in line with quarantine measures.

In light of the current “social distancing” practices, the WTO chief warned the nations against a “turn towards protectionism,” arguing it would only add to the economic suffering they are already enduring. "Keeping markets open to international trade and investment would help economies recover more quickly,” he said, calling on governments to bring the pandemic under control as soon as possible.

On the bright side, the WTO chief also said that economic recovery could be quite fast “regardless of how steep the initial fall is” — but only if right policies are in place.The pandemic has already taken a bite out of some of the world’s leading economies. For example, France has reported that the country faces its worst economic crisis since 1945.

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