| 14 April 2024, Sunday |

Global trade jumped 25% to record $28.5tn in 2021, Unctad says

After being hammered by the Covid-19 pandemic, global trade rose by 25% annually to a record $28.5 trillion last year, according to a report from the United Nations Conference on Trade and Development.

It climbed by approximately 13% over the previous year, according to the agency’s Global Trade Update report, which was released on Thursday. Last year, trade volume in both the goods and services categories grew at a comparable rate.

Goods commerce reached $5.8 trillion in the fourth quarter of last year, a new quarterly high. Trade in services reached $1.6 trillion for the same three-month period, slightly higher than pre-pandemic levels.

The increase in “commodity prices, fading pandemic restrictions, and a significant recovery in demand due to economic stimulus packages” contributed to the favorable trend in trade.

International trade trends are predicted to normalize this year, since these tendencies are expected to fade in the following months, according to Unctad.

According to Unctad, many variables are predicted to affect international commerce in 2022. Slower-than-expected economic growth, supply chain disruptions, mounting debt sustainability worries, the shift to a greener global economy, trade agreements, and trade regionalization are among them.

Because of growing inflation, supply chain disruptions, the Covid-19 Omicron variant, and concerns over China’s real estate industry, the International Monetary Fund decreased its global economic growth prediction for 2022 by 0.5 percentage points to 4.4 percent last month. The fund stated on Wednesday that global growth has slowed since it updated its projection in January.

Unctad predicts that global trade patterns will reflect these macroeconomic trends in 2022, with lower-than-expected trade growth.

Many freight customers are trying to secure shipping containers and overcome labor delays as a result of the Covid-19 crisis, which has exacerbated supply chain bottlenecks and highlighted substantial challenges in the logistics sector in recent months.
Acute supply chain disruptions have resulted in port congestion and delays, a container scarcity, and a dramatic increase in the cost of shipping products. Supply shortages and rising shipping costs have been exacerbated by rising energy prices.

Businesses’ efforts to strengthen supply chains and diversify their supplier base, according to the UN agency, could have an impact on global trade patterns.

“Major corporations have become increasingly focused on enhancing supply network reliability and risk management, but delays have persisted,” it stated.

The increased demand for sustainable products is expected to reflect this year’s trade trends.

“Government rules controlling the trade of high-carbon products may potentially foster such trends,” Unctad added.

“In addition, growing demand for crucial commodities required to sustain greener energy sources [such as cobalt, lithium, and rare earth metals] could change global trade patterns.”

Concerns over debt sustainability are projected to grow in the next quarters as inflationary pressure rises, and this could have an impact on global trade in 2022.

“A considerable tightening of financial conditions would increase pressure on the most heavily indebted governments, exacerbating vulnerabilities and negatively hurting investments and international trade flow,” according to the agency.

It expected that trade flows will become more regionalized in the coming months.

With the exception of the transportation equipment business, all economic sectors saw a year-over-year growth in the value of their trade in the latest quarter, according to Unctad.

Trade growth in communication equipment, road vehicles, and precision instruments was slightly reduced in the preceding quarter because to the Covid-induced scarcity of semiconductors.

  • The National News