A resurgence of global economic activity has lifted merchandise trade above its pre-pandemic peak, the World Trade Organization said Monday as it upgraded its 2021 and 2022 trade forecasts.
“The WTO is now predicting global merchandise trade volume growth of 10.8 percent in 2021-- up from 8.0 percent forecasted in March -- followed by a 4.7 percent rise in 2022,” up from four percent previously, the global trade body said.
The strong annual growth rate for merchandise trade in 2021 is mainly due to the collapse in 2020, when trade bottomed out in the second quarter.
The rate of growth is expected to moderate as merchandise trade returns to the long-term trend it was on before the COVID-19 crisis struck.
Supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains, but are unlikely to have large impacts on global aggregates, WTO experts said.
They said the biggest downside risks came from the pandemic itself.
“Trade has been a critical tool in combatting the pandemic, and this strong growth underscores how important trade will be in underpinning the global economic recovery,” said WTO director-general, Ngozi Okonjo-Iweala.
“But inequitable access to vaccines is exacerbating economic divergence across regions. The longer vaccine inequity is allowed to persist, the greater the chance that even more dangerous variants of COVID-19 will emerge, setting back the health and economic progress we have made to date.”
While regions with access to COVID-19 jabs and sufficient fiscal space were recovering strongly, poorer regions with mostly unvaccinated populations are lagging behind, she said.
The WTO’s 12th ministerial conference is to be held in Geneva from November 30 to December 3.
Okonjo-Iweala has said that one of her main objectives is to push long-blocked trade talks on fishery subsidies across the finish line.
The former Nigerian finance and foreign minister started her four-year term at the WTO helm in March. She dismissed as “fake news” reports that she was threatening to resign if no progress is made on major logjams at the global trade body.