India, China and South Africa have fared “relatively better” than other major economies in imports and exports in the first quarter of this year, according to the latest UN data which said that global trade recovery from the COVID-19 crisis hit a record high during in the same period.
The Global Trade Update by the United Nations Conference on Trade and Development (UNCTAD) on Wednesday said that in Q1 2021, the value of global trade in goods and services grew by about 4 per cent quarter-over-quarter and by about 10 per cent year-over-year.
“Importantly, global trade in Q1 2021 was higher than pre-crisis levels, with an increase of about 3 per cent relative to Q1 2019,” it said, adding that the trade rebound of Q1 2021 continues to be driven by the strong export performance of East Asian economies.
In Q1 2021, the value of trade in goods was higher than pre-pandemic level, but trade in services remains substantially below averages. During the first quarter of 2021, global trade of COVID-19 related products remained strong.
The UNCTAD data said that import and export trends for some of the world’s major trading economies further illustrate the recovery patterns of Q1 2021. With a few exceptions, trade in major economies recovered from the fall of 2020.
However, the large increases are due to the low base for 2020 and trade in many of the major economies was still below 2019 averages. The trend of a stronger recovery for goods relative to services is common to all major economies.
“China, India and South Africa have fared relatively better than other major economies during Q1 2021. China’s exports, in particular, registered a strong increase not only from 2020 averages but also in relation to pre-pandemic levels. In contrast, exports from the Russian Federation remained well below 2019 averages,” it said.
The data for India said that import of goods grew 45 per cent in Q1 2021 relative to the 2020 average while services imports were up 14 per cent. Export of goods for India grew 26 per cent for the period under review while services exports grew 2 per cent.
Further, import of goods grew 10 per cent in Q1 2021 relative to the 2019 average while services imports were up 2 per cent. Export of goods for India grew 7 per cent for this period while services exports declined 3 per cent.
UNCTAD said globally the ongoing trade recovery comprises most sectors.
During Q1 2021, trade continued to rebound not only in sectors related to COVID-19 such as pharmaceuticals, communication and office equipment but also increased for most other sectors, such as minerals and agri-food.
In contrast, the energy sector continues to lag behind and international trade of transport equipment remains well below averages, the UNCTAD said.
Looking forward, the UNCTAD said 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 6.6 trillion dollars in the second quarter of 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.
Trade growth is expected to remain strong in the second half of 2021, the overall forecast for 2021 indicates an increase of about 16 per cent from the lowest point of 2020 (19 per cent for goods and 8 per cent for services).
Giving the global trade outlook for 2021, the UNCTAD said the positive outlook for 2021 remains largely dependent on subsiding pandemic restrictions.
“Nevertheless, the fiscal stimulus packages, particularly in developed countries, are expected to strongly support the global trade recovery throughout 2021. The value of global trade should also rise due to positive trends across commodity prices.
“Still, there is uncertainty about how trade patterns will be shaped throughout this period,” it said.
Highlighting that the economic recovery will be “uneven”, it said that some economies are posed to rebound stronger and faster than others.
“In particular, the economies of China and the United States of America are expected to be the main drivers of global growth during 2021,” it said, adding that this should also have positive effects on countries whose trade is relatively more integrated with them (such as East Asian countries, Canada and Mexico).
On the other hand, the COVID-19 pandemic is expected to continue disrupting the economies and trade of many developing countries, at least throughout 2021.
The global economy shrank by 4.3 per cent last year, over two-and-a-half times more than during the global financial crisis of 2009.
In April last year, countries took fiscal measures and central banks together injected a whopping USD 14 trillion as part of their efforts to mitigate the challenges posed by the novel coronavirus pandemic.
The International Monetary Fund last month said that the global recovery is expected to be asynchronous and divergent between advanced and emerging market economies.