News
World trade's recovery from the COVID-19 crisis hit a record high in the first quarter of 2021, increasing by 10% year-over-year and 4% quarter-over-quarter, according to UNCTAD's Global Trade Update released on May 19. Trade in goods during the first quarter of 2021 was higher than the pre-pandemic level, but trade in services remained substantially below averages.
According to the report, the impressive rebound in Q1 2021 continued to be driven by the strong export performance of East Asian economies, whose early success in pandemic mitigation allowed them to rebound faster and to capitalize on booming global demand for COVID-19 related products.
It took four quarters after the start of the pandemic-induced recession for world trade to return to pre-recession levels. By the fifth quarter - Q1 2021 - global trade was higher than pre-crisis levels, with an increase of about 3% relative to Q4 2019.
Trade recovery remains uneven, the report notes, especially among developing countries, with exports from East Asia rebounding substantially faster.
East Asian economies are also behind the recovery of trade among developing countries (South-South trade). When trade figures from East Asian developing economies are excluded, South-South trade remains below averages.
The report shows that in Q1 2021 the value of exports remained below averages for countries with economies in transition, the Middle East, South Asia and Africa. Although South America’s exports increased relative to Q1 2020, they remained below 2019 averages.
It finds that in Q1 2021 the value of merchandise imports and exports of developing countries was substantially higher compared with Q1 2020 and Q1 2019 (by about 16%). Also, in Q1 2021 trade continued to rebound not only in sectors related to COVID-19, such as pharmaceuticals, communication and office equipment, but also others like minerals and agrifood.
In contrast, the energy sector continued to lag behind and international trade in transport equipment remained well below averages, the report shows.
The report forecasts that trade will continue growing in 2021, with the growth expected to remain strong in the second half of the year. The overall forecast for 2021 indicates an increase of about 16% from the lowest point of 2020 (19% for goods and 8% for services). The value of global trade in goods and services is forecast to reach $6.6 trillion in Q2 2021, equivalent to a year-over-year increase of about 31% relative to the lowest point of 2020 and of about 3% relative to the pre-pandemic levels of 2019.
But the positive outlook is largely dependent on reducing pandemic restrictions, a persisting positive trend in commodity prices, overall restraints from trade protectionist policies and supportive macroeconomic and fiscal conditions, the report says.
