UNCTAD updates outlook for global trade growth in 2021

World trade volume, since the beginning of the COVID-19 crisis, has rebounded to a record high in the first quarter of 2021, increasing 10% year-on-year, Report informs with reference to the Global Trade Update published by the United Nations Conference on Trade and Development (UNCTAD).

“In Q1, 2021, the value of global trade in goods and services grew by about 4 percent quarter-over-quarter and by about 10 percent year-over-year,” reads the report.

The report stresses that global trade in Q1 2021 was higher than pre-crisis levels, with an increase of about 3 percent relative to Q1 2019.

“The trade rebound of Q1 2021 continues to be driven by the strong export performance of East Asian economies. … China, India, and South Africa have fared relatively better than other major economies during Q1 2021. … In Q1 2021, the value of trade in goods was higher than pre-pandemic level, but trade in services remains substantially below averages. During Q1 2021, global trade of COVID-19 related products remained strong,” the study says.

The value of global trade in goods and services is forecast to reach US$ 6.6 trillion in Q2 2021, equivalent to a year-over-year increase of about 31 percent relative to the lowest point of 2020 and of about 3 percent to the pre-pandemic levels of 2019.

“Amid economic disruptions from COVID-19, on the whole global trade held up relatively well in 2020. Much of the trade resilience was due to 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,” the report notes.

The UNCTAD expects trade growth to remain strong in the second half of 2021, the overall forecast for 2021 indicates an increase of about 16 percent from the lowest point of 2020 (19 percent for goods and 8 percent for services).

The positive outlook for 2021 remains largely dependent on subsiding pandemic restrictions. Nevertheless, the fiscal stimulus packages, particularly in developed countries, are expected to strongly support the global trade recovery throughout 2021. The value of global trade should also rise due to positive trends across commodity prices.