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State of the Economy 2020-21: A Macro View 19
Figure 13: Global PMI Figure 14: World Merchandise Trade Growth
140 Merchandise Trade Volume
Trend (2011-2018)
120
100
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E 2021 F
Source: IHS Source: WTO
Note: World Trade in 2015 Indexed at 100
Figure 15: Commodity Prices Figure 16: Inflation Dynamics
Source: IMF Source: WEO October 2020 database, IMF
Note: * Data till November 2020
1.21 Global financial conditions have remained accommodative on the back of continued policy
support via unprecedented swift interventions by Central banks (Figure 17). Despite subdued
activity and a highly uncertain outlook, global equity markets have rebounded at a faster pace
from the March lows, though with notable differentiation across countries, depending on the
spread of the virus, the scope of policy support, and sectoral composition. Behind the broad
rebound of risky assets, there are clear signs of differentiation across sectors. Some sectors
(such as airlines, hotels, energy, and financials) have been more affected by the lockdown
and social distancing, whereas those that are less contact-intensive (information technology,
communications) have fared better. US dollar index has weakened by 7.4 per cent on year-to-
date basis in comparison to most G-10 currencies with countries adopting various policies to
alleviate downward pressure on their exchange rates (Figure 18).
