Friday, 21 January, 2022
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Global trade expected to grow by 23pc in 2021: Unctad

Global trade expected to grow by 23pc in 2021: Unctad

NEW YORK: Global trade, which was battered by the coronavirus pandemic, hit a record high in the third quarter of 2021 and is expected to rise 23 per cent to reach $28 trillion for the full year, according to a report by the United Nations Conference on Trade and Development.

Trade growth remained strong during the year and stabilised in the second half, rising 24 per cent on an annual basis in the third quarter and significantly higher than pre-coronavirus levels, report agencies.

However, the unevenness of the expansion, and potentially the emergence of a new coronavirus strain, serve as a backdrop for the uncertainty being forecast for 2022.

“The positive trend for international trade in 2021 is largely the result of the strong recovery in demand due to subsiding pandemic restrictions, economic stimulus packages and increases in commodity prices,” Unctad said in its Global Trade Update released on Tuesday.

Global trade was anchored by goods trade, which rose 0.7 per cent quarter-on-quarter to set an all-time high of $5.6tn in the three months to the end of September. Unctad expects it to hit a record of $22tn this year.

Trade in services, while increasing 2.5 per cent year-on-year to about $1.5tn, remained muted. It is projected to reach $6tn this year, still slightly below pre-pandemic levels.

Unctad’s data, however, does not take into consideration the potential effects of Omicron, the newest strain of the coronavirus detected in South Africa last week.

While it remains to be seen what its effects would be, economists generally expect that vaccination programmes and the ability of countries to quickly adapt to restrictions will help the world weather any ill-effects, the Financial Times reported.

This could add to the uncertainty as 2022 approaches. The recovery in trade this year has been marked by large and unpredictable swings in demand, which have resulted in increased stress on supply chains, Unctad said.

Logistics disruptions and high fuel prices have added to increasing shipping costs and supply shortages. The backlogs across major supply chain hubs that have characterised most of 2021 could continue into 2022, Unctad said, adding that it would negatively affect trade and possibly reshape trade flows.

The strong economic recovery of the first half of 2021, however, slowed during the second, Unctad said.

China posted trade growth of 16 per cent in the third quarter, second only to Taiwan’s 23 per cent.