(Arête News) — World Trade Organization figures on Wednesday showed global services trade growth was slowing at the end of 2019 and into 2020, as countries began taking steps to try to slow the spread of the global coronavirus outbreak.
The latest reading of 96.8 on WTO’s services trade barometer is a further decline from 98.4 recorded last September and below the baseline value of 100, suggesting that a recovery is not yet in sight, WTO said in a statement.
“The indicator does not yet fully reflect the economic impact of the COVID-19 virus and may decline further in the coming months,” according to WTO, the only global organization that deals with the rules of trade between nations. “The current barometer reading and the spread of COVID-19 suggest that services trade may slow further in coming periods.”
Also on Wednesday, U.S. President Donald Trump announced a 30-day travel ban on visitors from 26 European nations following the World Health Organization’s declaration that the outbreak of the disease caused by coronavirus is officially a pandemic. More than 118,000 cases have been reported across 114 countries, resulting in nearly 4,300 deaths.
Even before the outbreak, growth in services trade was slowing. Year-on-year growth in the WTO index slumped to 2.8 percent in the third quarter of 2019, down from 5.7 percent in the fourth quarter of 2018.
#COV19 is affecting trade in services too like air travel, shipping and more. The latest reading of 96.8 in the WTO Services Trade Barometer suggests below trend growth. Full report: https://t.co/VCM73Fdm7m #WTOStats pic.twitter.com/1aGcw06XKx
— WTO (@wto) March 11, 2020
Among the barometer’s components, the largest declines were in passenger air travel (93.5) and container shipping (94.3).
“Both indices cover developments through January and may partly reflect early efforts to halt the spread of the disease, which intensified toward the end of the month,” WTO said.
Indices for financial services (97.7) and ICT services (97.0) also dipped below the trend, while the construction index (99.8) held steady. The global services PMI (96.1) is the most forward-looking barometer component, reflecting expectations that COVID-19 will continue to weigh on services trade in the near term.
Trump’s travel ban, which doesn’t target the U.K. or Ireland, comes as stock markets plunge around the world on uncertainty about how long the economic impact of the pandemic will last, and how deeply it may be felt.
Conventions, trade events and other gatherings requiring travel and face-to-face meetings were postponed or suspended indefinitely this week, as many companies encouraged telework and schools sent students home in a bid to reduce risks of spreading the illness.
One of Hollywood’s biggest stars, Tom Hanks, announced that he and his wife, actress Rita Wilson, had tested positive for the coronavirus, as did a player for the NBA’s Utah Jazz basketball team, prompting the league to suspend all games for the rest of the season.