The pulse of the global economy seems to be recovering

The drop in global trade volume has slowed down in August 2020 as well, according to data from the World Trade Monitor report, published by the Dutch Institute CPB (www.cpb.nl).

Following a monthly increase of 2.5%, after an advance of 5% in the previous month, the annual contraction moderated to 4.4%, from 6.4% in the previous month. With the exception of an annual increase of 0.4% in December 2019, the volume of global trade has decreased annually since June 2019.

After the first eight months of 2020, global trade was 3.5% below last year's level and 5.8% below the record set in October 2018.

The volume of trade in developed economies has seen a slowdown in its annual decline to 5.5% from 8% in the previous month, amid a monthly increase of 3%, and the annual contraction in emerging economies trade slowed down to 2.3%, from 3.2% in the previous month, due to a monthly increase of 1.6%.

The Eurozone trade volume index moderated its annual decline to 6.2% from 9.5% in the previous month, amid a monthly increase of 3.3%, as the annual decline in imports dropped to 6.8%, from 9.7%, and the annual decrease of exports slowed down to 5.7%, from 9.3%, amid a monthly increase of 4%.

Amid the turnaround in trade in the Eurozone, a slowdown in the decline was also witnessed in Central and Eastern Europe, where the annual drop has shrunk to 3.6%, from 3.9%, amid a monthly increase of 0.8%.

Exports moderated their annual growth to 2.1%, from 3% in the previous month, amid a monthly increase of 0.5%, and imports moderated their annual decline to 9.9%, down from 11.3% in the previous month, amid a monthly advance of 1.3%.

In emerging economies in Asia, excluding China, the annual decline in trade went from 11 to 10%, even amid a monthly decline of 1.7%. The volume of exports accelerated its annual contraction to 5.2%, from 3.5%, following a monthly drop of 5.5%, and the drop in imports slowed down to 14.2%, from 17.8%, amid a monthly increase of 2.3%.

In August 2020, growth in China's trade 2020 fell to 6.8% from 8.2% in the previous month, amid a 2.9% monthly increase, after a 4.7% increase in the previous month.

While China's imports moderated their annual growth to 7%, from 11.1%, amid a monthly increase of 3.4%, exports accelerated their annual growth to 6.6%, from 5.4% in the previous month, amid a monthly rise of 2.3%.

The drop in Japan's trade volume decreased to 11.3%, down from 14.1%, amid a new monthly increase of 1.9%, as the drop in export volume reached 10.1%, down from 16.2% last month, due to a monthly increase of 6.6%. The drop in imports slightly picked up speed, going from 12.1% to 12.4%, from 12.1%, amid a monthly decline of 2.1%.

After an escalation of the annual contraction in the previous month, the drop in the volume of commercial exchanges in Latin America slowed down in August 2020 YOY, to 7.95, from 11.1%, amid a monthly increase of 2.1%. The drop in imports has tempered its annual drop to 16.5%, from 24.3%, amid a monthly increase of 5.2%, and exports have decreased at an annual rate of 0.2%, after rising 1.6% last month, following a monthly contraction of 0.2%.

Recovery continued in US trade, although there was a significant reduction in monthly growth rates. The annual decline in the volume of trade moderated its annual decline to 6.5%, from 8.3%, amid a monthly increase of 2.4%, after a rise of 11.1% in the previous month.

The decline in exports slowed down to 10.6%, from 12.4% in the previous month, following a monthly increase of 2.5%, and the annual decline in imports slowed down to 2.7%. from 4.4%, amid a monthly increase of 2.3%.

The positive trend continued in the US and in September 2020 as well, according to the latest data from the Cass Information Systems (CIS) transport index. Following a monthly rise of 8.1%, on the heels of another 8% rise in the previous month, the annual contraction dropped 1.8%, from 7.6% in August 2020.

CIS analysts say the move is in line with a "V-shaped" economic recovery and stresses that "consumer confidence, while low, is showing encouraging signs of life."

CPB data also shows a 3% annual decrease in global industrial output in August 2020, after a decline of 4.2% in the previous month, amid a monthly increase of 1%.

Industrial production in the euro area moderated its annual decline to 6.6%, from 7.5% in the previous month, with a monthly increase of 1%, and industrial production in Central and Eastern Europe moderated its the annual decline to 6.4%, from 7.2%, amid a monthly increase of 1.1%.

The positive trend in global trade will continue until the end of the year, according to the latest data from UNCTAD (UN Conference on Trade and Development), reproduced by Reuters.

The organization's estimates show that an annual decline of 4.5% in Q3 2020 will be followed by an annual increase of about 3% in Q4 2020, but the degree of uncertainty of the forecasts is particularly high, especially amid the escalation of the second wave of the coronavirus pandemic.

"An accelerated increase in the number of cases globally may lead to the application of an increasing number of restrictive trade policies," the UNCTAD report said, which could extend into the first half of next year as well.