19-Oct-2020 10:01 AM

IATA: Air cargo may be slow to recover as international trade expected to remain subdued

IATA reported (16-Oct-2020) the following commentary on the World Trade Organisation's (WTO) latest outlook for the global economy and international merchandise trade:

  • The global economy is forecast to contract by almost 5% in 2020 then rebound by a similar magnitude in 2021;
  • The expected fall in trade of 9.2% in 2020 represents an upwards revision compared to the optimistic scenario predicted in Apr-2020. The anticipated recovery in 2021 was downgraded to 7.2%;
  • IATA stated the rebound in international trade following a sharp recession is typically quite strong. However, the WTO expects trade volumes will remain "well below" the pre-crisis trend for reasons including the adverse impact of the pandemic on employment and incomes, policy responses that have imposed additional debt and supply constraints on economies and the possibility of ongoing international trade tensions. IATA stated: "The risks to the outlook are still considered to be firmly to the downside";
  • IATA noted that air cargo typically recovers more quickly than other modes of transport during a period of economic recovery, as businesses seek to rapidly restock their inventories in response to the pick up in demand. The association stated the more subdued recovery expected in international trade highlights the risk that the forecast rebound in air cargo volumes might also be slower. [more - original PR]

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