The International Chamber of Commerce’s (ICC) issued its 11th annual Global Survey on Trade Finance, highlighting how COVID-19 has created an unprecedented environment for trade, disrupting economic activity and the flow of goods across supply chains.
This year’s Global Survey has again provided insights into the trends shaping trade finance, and a fact-based, data-driven view of some of the trade industry’s hypotheses on trade.In addition, the short supplementary COVID-19 Survey has allowed us to understand some of the emerging challenges and responses arising from the crisis across the globe.
…the survey noted.
According to the report, although global trade remained at a near-record high of USD 18.1 trillion in 2019, the onset of the COVID-19 crisis is expected to dramatically impact both the world economy and global trade in the short-to-medium term.
Key findings:
- Banks from all geographies are already noticing the impact of COVID-19 on trade flows, with most reporting a 0-10% decrease in Q1 2020. Banks expect an even more significant decline in trade flows for the full year, with the majority expecting at least a 20–30% decline from original forecasts, which broadly aligns with both WTO and BCG scenarios.
- Trade banks, particularly those serving global customers, are broadly adopting supply chain finance platforms and expect further growth in this space. However, there is an ongoing divide between global and non-global banks, with 64% of global banks offering SCF platforms, compared to just 13% of local banks and 38% of regional banks.
- 73% of survey respondents feel that there is a shortage in servicing the needs of the global market, and the
majority believe that there is a role for governments and export credit/multilateral agencies to help close this
gap. - While digitisation is widely seen as one of the most important trends to shape trade and trade finance in the coming years, there is a clear divide: as 83% of global banks have a digital strategy, only 46% of local banks report having one.
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