|
||
|
TWN
Info Service on WTO and Trade Issues (Feb22/17)
UN: Global trade hits record high in 2021, but likely to
slow this year Geneva, 17 Feb (Kanaga Raja) - Global trade reached a record high of about US$28.5 trillion in 2021, an increase of almost 13 per cent relative to pre-COVID-19 pandemic levels, the UN Conference on Trade and Development (UNCTAD) has reported. In its latest Global Trade Update, released on 17 February, UNCTAD said while growth in global trade accelerated during the last quarter of 2021, it is expected to slow in the first quarter (Q1) of 2022. According to the UNCTAD report, during the fourth quarter (Q4) of 2021, trade in goods remained strong and trade in services finally returned to its pre-pandemic levels. Furthermore, developing countries' trade outperformed that of developed countries in Q4 2021, while growth in South-South trade was above the global average, it said. According to the UNCTAD report, global trade growth remained strong during 2021, as its value continued to increase through each quarter of that year. Trade growth was not only limited to goods, as trade in services also grew substantially through 2021, to finally reach pre-pandemic levels during Q4 2021, said UNCTAD. "Overall, the value of global trade reached a record level of about US$28.5 trillion in 2021, an increase of about 25 per cent relative to 2020 and an increase of about 13 per cent relative to the pre-pandemic level of 2019." While most global trade growth took hold during the first half of 2021, growth continued in the second half of that year. UNCTAD said after a relatively slow third quarter, trade growth picked up again in Q4 2021, when the value of global trade increased by about 3 per cent relative to the third quarter (Q3) of 2021. Trade in goods and trade in services followed similar patterns during 2021, with stronger increases during the first half of the year, it added. "Trade growth continued to be positive for both goods and services in Q3 2021 and especially in Q4 2021." During Q4 2021, trade in goods increased by almost US$200 billion to reach about US$5.8 trillion, setting a new record, said the report. During the same period, trade in services rose by about US$50 billion to reach about US$1.6 trillion, a value just above pre-pandemic levels. On a year-over-year basis, trade in goods strongly outperformed trade in services, with an increase of about 27 per cent and 17 per cent respectively. "The UNCTAD nowcast indicates that trade growth will continue to slow during Q1 2022," said the report. Positive growth rates are expected for both trade in goods and in services, albeit only marginally, keeping trade values at similar levels to Q4 2021, it added. The positive trend for international trade in 2021 was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages, said UNCTAD. "As these trends are likely to abate, international trade trends are expected to normalize during 2022," it added. Overall, the evolution of world trade in 2022 is likely to be affected by the following factors: slower than expected economic growth; continuing challenges for global supply chains; trade agreements and regionalization trends; the transition towards a greener global economy; and rising concerns about debt sustainability, said UNCTAD. UNCTAD noted that economic growth forecasts for 2022 are being revised downwards. For example, the International Monetary Fund cut its world economic growth forecast for 2022 by 0.5 points (from 4.9 to 4.4) because of persistent inflation in the United States and concerns related to China's real estate sector. It is likely that global trade trends will reflect these macroeconomic trends, with lower-than-expected trade growth, said UNCTAD. According to UNCTAD, the COVID-19 pandemic resulted in unprecedented pressures on supply chains. It said logistic disruptions, a semiconductor shortage and rising energy prices have further contributed to supply shortages and spiralling shipping costs. "As a result, major companies have become strongly focused on improving reliability and managing risks for their supply networks, but delays have persisted nevertheless." Efforts to shorten supply chains and to diversify suppliers could affect global trade patterns during 2022, said the report. The report noted that on January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) entered into force. It said this trade agreement facilitates trade among many of the East Asian and Pacific economies, and is expected to significantly increase trade between members, including by diverting trade from non-member countries. The regionalization of trade flows is also expected to increase in other parts of the world in line with other regional initiatives (e.g., the African Continental Free Trade Area), as well as due to increasing reliance of geographically closer suppliers, it added. UNCTAD also said that trade patterns in 2022 are expected to reflect the increasing global demand for products that are environmentally sustainable. "Such patterns may also be supported by government policies regulating the trade of high-carbon products." Moreover, global trade patterns could also be influenced by increased demand of strategic commodities required to support greener energy alternatives (e.g., cobalt, lithium, and rare earth metals), said the report. UNCTAD also said given the record levels of global debt, concerns of debt sustainability are likely to intensify in the incoming quarters due to mounting inflationary pressures. "A significant tightening of financial conditions would heighten pressure on the most highly indebted governments, amplifying vulnerabilities and negatively affecting investments and international trade flows." TRENDS IN MAJOR ECONOMIES Highlighting some trends in the imports and exports of some of the world's major trading economies, the UNCTAD report said in Q4 2021, trade in goods in all major economies was well above pre-pandemic levels in 2019, for both imports and exports. Negative quarter-over-quarter rates reveal that the positive exports trends reversed for some of the major economies during Q4 2021. Nevertheless, export growth in this period remained strong for China, the United States and also for the Republic of Korea. Conversely, import trends continued to be positive, said UNCTAD. In Q3 2021, trade in services for most major economies was still substantially lower than pre-pandemic averages of 2019. However, as shown by quarter-over-quarter rates, Q3 2021 marked a substantial recovery in services trade for all major economies, with the exception of Japan. In Q4 2021, trade in goods increased more strongly for developing than for developed countries, said UNCTAD. Exports of developing countries in Q4 2021 were about 30 per cent higher than in Q4 2020. In comparison, this figure is about 15 per cent for developed countries, it added. Moreover, trade growth between developing countries (South-South) outpaced global trade during Q4 2021, with an increase of about 32 per cent relative to Q4 2020, and with an increase of about 38 per cent when excluding East Asian economies. Similar patterns are found when comparing Q4 2021 with the pre-pandemic levels, said the UNCTAD report. Trade growth rates in Q4 2021 remained very strong across all geographic regions, although lower in Europe, North America and East Asia. Export growth has been generally stronger in commodity-exporting regions, as commodity prices have increased. At the sectoral level, the report said that with the exception of transport equipment, all economic sectors saw a substantial year-over-year increase in the value of their trade in Q4 2021. "High fuel prices are behind the strong increase in the value of trade of the energy sector. Trade growth was also above average for metals and chemicals." As a result of the global shortage of semiconductors, trade growth in communication equipment, road vehicles and precision instruments was subdued during Q4 2021, said UNCTAD.
|
||
