According to the latest report by the World Trade Organization (WTO), global trade is expected to fall between 13% and 32% in 2020.
The corona virus pandemic has uprooted world trade and depressed demand. According to the World Trade Organization, a significant decline in world trade can be expected.
World trade is expected to decrease
With the decline in global demand due to the corona virus pandemic, the World Trade Organization is lowering expectations of world trade. According to the latest report, “World trade is expected to fall between 13% and 32% in 2020.”
WTO: Global trade is expected to decrease by 13% to 32% in 2020 as the COVID 19 pandemic disrupts normal economic activity and life around the world. https://t.co/yMe4mrJY9S
– Sally Shin (@sallyshin) April 8, 2020
According to the report, the immediate goal is to control the pandemic. “However, these numbers are ugly – there is no way around them,” the report says.
The report also underlines that the current economic crisis is not comparable to the Great Recession of 2008. During the past recession, governments intervened in monetary and fiscal policies to address the economic crisis. This time, however, restrictions on transportation, work, and travel affect the global economy in very different ways. It is therefore difficult to predict how the global economy will develop in 2021 or 2022.
A deflationary shock?
Analysts have argued that the global economy could experience a deflationary shock due to depressed demand. Due to mass layoffs, ordinary people simply don’t have the purchasing power they once had, which will depress income and ultimately prices.
The endless printing of Federal Reserve funds has caused many in the crypto space to argue that we could see a hyperinflationary crisis, but this doesn’t seem to be in the short-term forecast. However, there is evidence that credit is running low as companies borrow in record numbers. Although the Federal Reserve prints about $ 60 million in new currency every minute, immediate fears are now deflationary, although this could temporarily change the situation for a subsequent inflation crisis.
The main selling point ofis that it’s a hedge against inflation and the fiat currency. Given that we are currently in an extremely deflationary phase, Bitcoin’s short-term future seems uncertain. Many traders are now looking at macroeconomic trends to assess where Bitcoin is headed, despite the long-awaited halving that will take place in mid-May.
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