Global trade according to the United Nations Commission for Trade and Development (UNCTAD), increased by 10 percentage points on a year-on-year basis in the first quarter of 2021.
On a quarter-on-quarter basis – Q4 2020 and Q1 2021 – global trade, UNCTAD notes, increased by 4 percent.
According to the Commission, global trade in Q1 2021 was higher than pre-crisis levels, with an increase of about 3 per cent relative to Q1 2019.
UNCTAD, in its May 2021 Global Trade Update, asserted that the rebound in global trade was on the back of trade resilience 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.
Global trade growth is expected to remain strong in the second quarter of 2021 posting a year-over-year increase of about 31 per cent for the same period in 2020.
The 31 percent YoY increment in global trade in Q2 2020, UNCTAD posits will translate into a value of $6.6 trillion in traded goods.
While trade rebounds strongly in East Asian economies and developed economies, trade is expected to lag behind in developing countries due to slow vaccination of citizens.
“Looking forward, trade is expected to continue growing into 2021. Trade growth is expected to remain stronger for East Asia and developed countries, while still lagging for many other countries. The value of global trade in goods and services is forecast to reach US$ 6.6 trillion in Q2 2021, equivalent to a year-over-year increase of about 31 per cent relative to the lowest point of 2020 and of about 3 per cent to the pre-pandemic levels of 2019,” noted UNCTAD.
Sharing its outlook on global trade for the rest of 2021, UNCTAD in its update affirmed a positive outlook for global trade largely dependent on subsiding pandemic restrictions.
Adding fiscal stimulus packages, particularly in developed countries will strongly support global trade recovery throughout 2021.
“The value of global trade should also rise due to positive trends across commodity prices,” the Commission stated further.
UNCTAD however, opined that some level of uncertainty still remains with factors that could possibly affect the positive outlook include; uneven economic recovery, reshoring and nearshoring trends, government interventions and policies affecting international trade, macroeconomic instability brought by higher levels of debt and lasting changes in consumers’ spending.