Trade Financing and COVID-19
Mind the Trade Finance Gap
The restoration of cross-border trade will undoubtedly be vital in driving a global economic recovery in the wake of the COVID-19 pandemic. A return to trade-led growth will hinge on creating enabling conditions for businesses to import, export and service international markets.
A critical element of an enabling trade environment is the availability of trade finance. Globally, a significant share of trade is financed by some form of credit, guarantee or insurance – meaning that most businesses will need cost effective trade-related credit to support the recovery of both imports and exports. This will be a challenge; the ICC conservatively estimates that financing capacity ranging from a lower end estimate of USD2trn to an upper end estimate of USD5trn will be needed to meet this demand.