The current world health crisis will result in a decline of 9.2% in EU exports and 8.8% in EU imports from third countries in 2020, according to the EU Chief Economist note, based on the estimated decline in GDP worldwide.
The increasing spread of the virus has prompted many governments to temporarily shut down businesses, and restrict travel and the movement of people. These measures will lead to sharp contractions in the level of economic output, household spending, investment and international trade.
While there is a wealth of forecasts on GDP growth in 2020, there is a limited range of work done on trade projections for 2020, in particular for EU trade.
The analysis outlined in this note is one of the few attempts at predicting the impact of the COVID19 outbreak on trade flows. In order to test the robustness of this analysis, results are also compared to the latest WTO trade forecasts published on 8 April.