The decline in global goods trade volumes caused by the Covid-19 pandemic appears to have been less drastic than predicted by the World Trade Organization (WTO) in late 2020, with export growth in Asia during the second half of the year matched by increased demand from other markets.

In its most recent goods trade barometer, the WTO says growth in trade volumes remained strong in the fourth quarter of 2020, after a stronger-than-anticipated rebound during Q3.

The UN Conference on Trade and Development (UNCTAD) previously reported there were signs of a “frail recovery” in Q3, led by surging exports from China, after a major slump in Q2 caused by virus containment measures put in place across the world.

The WTO confirms that trend, and says it now appears that the revival of economic activity across Asia was matched with an increase in imports in North America and Europe.

Overall goods trade volumes in Q3 were still 5.6% lower than during the same period in 2019, but the organisation says: “These declines, while still very large, are less severe than many analysts feared at the start of the pandemic.

“The WTO’s most recent trade forecast of October 6, 2020 predicted a 9.2% drop in the volume of world merchandise trade in 2020, but the actual decline may be slightly less severe.”

At the start of the pandemic, its warnings were more grave still, forecasting a drop in global merchandise trade of between 13% and 32%.

Average copper futures prices – used by the organisation as a bellwether for economic activity due to the role of the metal in manufacturing – have climbed by around 25% compared to October last year.

“This may reflect optimism about medium-term economic prospects as effective vaccines are being distributed and as seasonal variation may cause the number of Covid-19 cases to fall in the coming months,” it says.

However, the WTO warns there is still substantial uncertainty over longer-term trends.

In the case of copper, the improvement in futures pricing could be caused by strong economic performance in Asia that is not matched elsewhere in the world.

Though indices for raw materials more widely are “firmly above trend”, this could signal stockpiling of inventories rather than immediate activity, it adds.

“Prospects for 2021 and beyond, moreover, are increasingly uncertain due to the rising incidence of Covid-19 worldwide and the emergence of new variants of the disease,” the WTO says. “Recovery will depend to a large extent on the effectiveness of vaccination efforts.”

In December, progress around vaccine development and procurement prompted a positive outlook from Deutsche Bank, with executives predicting that trade finance would be “one of the winners in a post-Covid-19 environment”. The bank forecasted a rebound of more than 7% during 2021.

But since then, the WTO says the appearance of new variants of the virus “will undoubtedly weigh on goods trade in the first quarter of 2021”, adding that some indicators of economic recovery may already have peaked.

The goods barometer is the WTO’s first since the appointment of Nigeria’s Ngozi Okonjo-Iweala as director general. It says it expects to publish its next trade forecast in mid-April.