The COVID-19 pandemic has resulted in unprecedented falls in services trade for most economies. Services exports from advanced economies contracted by28% y-o-y in Q2 2020, steeper than the 25% decline in goods exports from these markets, a HSBC global report said.
Emerging markets have also experienced steep contractions in their services exports with few signs of revival amid ongoing travel restrictions. Thailand’s services exports tumbled by over 70% and Malaysian services exports were down 55% y-o-y in the second quarter.
Unlike during the Global Financial Crisis when services trade demonstrated remarkable resilience compared to goods trade, services flows are bearing the brunt of the trade shock this time around.
“And with the number of COVID-19 infections once again gathering pace, particularly in the northern hemisphere which will soon be heading into winter, it is unlikely that international travel will rebound anytime soon,” the report further adds.
On the other hand,