The volume of world merchandise trade is expected to increase by 8% in 2021, new figures show, after having fallen 5.3% last year.
Prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year, according to new figures from the World Trade Organization (WTO).
The relatively positive short-term outlook for global trade, however, is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries. Covid-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any hoped-for recovery. Trade growth is expected to slow to 4% in 2022.
“The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses, and economies,” says WTO Director-General Ngozi Okonjo-Iweala. “Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need.
“Ramping up production of vaccines will allow businesses and schools to reopen more quickly and help economies get back on their feet. But as long as large numbers of people and countries are excluded from sufficient vaccine access, it will stifle growth, and risk reversing the health and economic recovery worldwide,” she said.
For the whole of 2020, merchandise trade was down 5.3%. This drop is smaller than the 9.2% decline foreseen in the WTO’s previous forecast in October 2020. The better than expected performance towards the end of the year can partly be explained by the announcement of new Covid-19 vaccines in November, which contributed to improved business and consumer confidence.
In 2021, demand for traded goods will be driven by North America (11.4%) thanks to large fiscal injections in the United States, which should also stimulate other economies through the trade channel. Europe and South America will both see import growth of around 8%, while other regions will register smaller increases.