Two-speed recovery in services trade expected: HSBC
International travel likely to stay suppressed, but digital services could recover more quickly
THE Covid-19 pandemic will lead to a two-speed recovery in services trade, whereby international travel is likely to remain largely suppressed due to travel restrictions, while digital services may recover more quickly, said HSBC trade economist Shanella Rajanayagam in a report.
However, growth in digital services is unlikely to fully offset the collapse in travel in the near term. This suggests that services trade is likely to remain well down on pre-pandemic levels for some time to come, for most economies. On the other hand, digitally-enabled and R&D services could see a post-Covid boost, as businesses look to build resilience into supply chains and reshore some production from overseas.
Tackling barriers to digital trade and improving digital infrastructure will help support greater digital flows across borders, and could help speed up the recovery in global services trade, she said.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Putin plans to meet Xi in China days after his new term starts
Biden vetoes bid to repeal US labour board rule on contract, franchise workers
Economic leaders of South Korea, Japan, China say FX volatility is a risk
US automakers win extension on use of Chinese graphite in EV tax credits
US service sector contracts in April; price pressures up
Thaksin’s daughter calls central bank independence an ‘obstacle’