World trade expected to grow 8% in 2021Apr, 02, 2021 Posted by Ruth Hollard
According to projections by the World Trade Organization (WTO) released on March 31, world trade will grow by 8% in 2021, a rate of expansion slightly higher than expected. Even so, this pace will not allow a return to pre-pandemic levels. Previously, the international body’s expectations for 2021 was for growth of 7.2%.
The WTO figures are in line with Brazilian container handling in February 2021. Data recently released by DataLiner show that imports via containers in February grew by 15% in comparison with the same month in 2020. Exports already increased by 6% compared to February 2020. Check the V curve of the Brazilian economy in the graph below:
Brazilian Imports and Exports | Jan 2019 to Feb 2021 | TEU
Graph source: DataLiner (To request a DataLiner demo click here)
Even so, the relatively positive short-term outlook for global trade is hampered by regional disparities, continued weaknesses in commercial trade services, and delays in vaccination schedules, especially in poor countries. COVID-19 continues to pose the greatest threat to trade prospects, as new waves of infection can easily undermine any expected recovery.
For 2022. according to the WTO, trade growth should be 4.0% and the effects of the pandemic will continue to be felt, as this pace of expansion would keep trade below the pre-covid-19 trend.
It is worth mentioning that in 2020, world trade plunged 5.3% but the drop was less than the 9.2% reduction projected by the organization in October of that year.
“The strong recovery in global trade since the middle of last year has helped to ease the pandemic blow for people, companies, and economies,” said WTO Director-General Ngozi Okonjo-Iweala. “Keeping international markets open will be essential for economies to recover from this crisis and the rapid, global, and equitable distribution of the vaccine is a prerequisite for the strong and sustained recovery that we all need.”
“Increasing vaccine production will allow businesses and schools to reopen more quickly and help economies to recover. But as long as a large number of people and countries are excluded from sufficient access to vaccines, this will stifle growth and reverse the economic recovery around the world, “she said.
Okonjo-Iweala added that trade through value chains helped countries gain access to essential food and medical supplies during the crisis. “Vaccine manufacturing requires inputs from many different countries. One of the main COVID-19 vaccines includes 280 components from 19 different countries,” she said. “Trade restrictions make it more difficult to increase production. The WTO helped maintain the flow of trade during the crisis. Now, the international community must leverage the power of trade to expand access to life-saving vaccines.”
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