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69. UNCTAD: COVID-19 Induced Contraction of International Trade and Foreign Direct Investment Due

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In June 2020, the United Nations Conference on Trade and Development (UNCTAD) forecasted a 20% drop in international trade and a 40% drop in foreign direct investment in 2020. According to the latest data from the UNCTAD Quarterly Global Trade Update, merchandise trade is expected fell by 5% in the first quarter of this year, and is expected to fall by 27% in the second quarter and a 20% annual decline in 2020.

The report shows that the economic disruptions due to COVID-19 have affected all countries and is expected to be particularly devastating for developing countries. In particular, exports fall due to slumping demand in customer markets in developing countries and the drop in imports would be affected not only by domestic demand, but also by foreign exchange, which reflects concerns about debt and shortages of foreign currency.

The latest UNCTAD data on international trade are available in the first edition of the Global Trade Update. Details of the global flows of foreign direct investment (FDI) are available in the World Investment Report 2020: International Production Beyond the Pandemic.

 

References

UNCTAD. Global trade continues nosedive, UNCTAD forecasts 20% drop in 2020. 11 June 2020 

UNCTAD.  Global foreign direct investment projected to plunge 40% in 2020. 16 June 2020 

 

Contributor: IIYAMA Miyuki (Research Strategy Office)