The United Nations Conference on Trade and Development disclosed that world trade’s recovery from the COVID-19 crisis hit a record high in Q1 2021, increasing by 10% year-over-year and 4% quarter-over-quarter.
The agency disclosed this in its Global Trade Update released on Wednesday, citing that the rebound in Q1 2021 was driven by the strong export performance 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.
What the UNCTAD is saying about rising global trade
“Global trade has recorded a faster recovery from the recession caused by the pandemic than in the last two trade recessions.
It took four quarters after the start of the pandemic-induced recession for world trade to return to pre-recession levels. By the fifth quarter – Q1 2021 – global trade was higher than pre-crisis levels, with an increase of about 3% relative to Q4 2019.
In Q1 2021 the value of trade in goods was higher than pre-pandemic level, but trade in services remains substantially below averages.”
Uneven trade recovery
The UN says that amongst developing nations, the trade recovery remained uneven, with exports from East Asia rebounding substantially faster.
They added that in Q1 2021 the value of exports remained below averages for countries with economies in transition, the Middle East, South Asia and Africa.
“Energy sector continued to lag behind and international trade in transport equipment remained well below averages, the report shows,” they added.
Trade forecast for 2021
The report also stated that Trade growth is expected to remain stronger for East Asia and developed countries, while still lagging for many other countries, forecasting an increase of about 16% from the lowest point of 2020 (19% for goods and 8% for services).
“The value of global trade in goods and services is forecast to reach $6.6 trillion in Q2 2021, equivalent to a year-over-year increase of about 31% relative to the lowest point of 2020 and of about 3% relative to the pre-pandemic levels of 2019.”
What you should know
The WTO disclosed earlier this month that global trade costs have dropped by 15% between 2000 and 2018. While the trade costs for services are higher than trade costs for agricultural goods, trade costs for manufactured goods are the lowest.