World trade fell by 18.5% in the second quarter of the year as the Covid-19 pandemic hit the global economy, the World Trade Organisation (WTO) said on Monday.

“The fall in trade we are now seeing is historically large – in fact, it would be the steepest on record,” said Director‑General Roberto Azevêdo. “But there is an important silver lining here: it could have been much worse.”

In April the WTO had warned that the worst-case scenario for global trade was a 32% fall in the quarter. It praised the global response to the crisis for limiting the fall.

The WTO Director-General said: “Policy decisions have been critical in softening the ongoing blow to output and trade, and they will continue to play an important role in determining the pace of economic recovery. For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction.”