Global trade recovery during Covid
The Covid-19 pandemic has made long-lasting impacts on the global economy. It’s never be easy for any country, industry, business and human to come out of economic shocks in near future. Hampering the growth of decades, the crisis has not been bias regarding divides. The divides and inequalities have increased between rich or poor, urban or rural, educated or illiterate, and male or female. However, there are many people who have suffered more than others. Same trend goes with businesses and industries too.
While e-commerce businesses remained on the growth side, service industries bore the brunt of Covid-linked shutdown measures. Overall, global trade bounced back early this year, but services remain in downside, says report. According to the UNCTAD’s Global Trade Update, the global trade saw the record high with value of goods trade surpassing pre-pandemic levels during Q1 of 2021, a 10 percent rise from last year. However, service industries remained far lower than their pre-pandemic graph.
Rebound may continue in coming months
The economic rebound was made possible by exports from East Asian economies, mainly China, said the UN economists. However, trade recovery remained slower for other developing regions and nations, including Russia. Further, the rebound is likely to continue in Q2 too, with collective value of goods and services touching $6.6 trillion. UNCTAD’s Global Trade Update estimated this growth to be 3 percent higher than pre-Covid levels of 2019. The economies of China and the United States of America are expected be the key drivers of global growth.
Moreover, the economies that trade with the US and China should see positive effects, said the UN agency. These economies include East Asian countries, Canada and Mexico. However, the pandemic impact will continue disrupting trade in a number of developing countries “at least throughout 2021”. UNCTAD maintained that its positive outlook for 2021 was “largely dependent” on the nations that continue to subsidize pandemic restrictions. The fiscal stimulus packages, mainly in developed countries, are likely to give a strong support to the global trade recovery throughout the year.
Global trade recovery during Covid
UNCTAD economist Alessandro Nicita noted that global trade recovery from Covid-19 slowdown was faster than that in the last two trade recessions. World trade returned to pre-recession levels four quarters after beginning of Covid-linked recession, said Nicita, who worked on the report. During 2015 slowdown, which was the after-effect of structural changes in East Asian economies and declines in commodity prices, global trade took 13 quarters to bounce back. Earlier in 2009, global trade returned to previous levels after nine quarters of recession that occurred due to the global financial crisis. Earlier this month UNCTAD predicted the recovery speed of the global economy form Covid-linked slowdown was “faster than expected”.
The UN agency predicted the global economy to grow by 5 percent in 2021 – “a rate never seen in over a decade”. UNCTAD, however, suggested governments to avoid mistakes committed during the crises happened in the past. These mistakes include cutting down supportive fiscal and monetary policies too early. In another statement, the agency also revealed spending trend of developing countries over the years. These countries spent more on debt than education, health and social protection combined. It also expressed the need of debt relief in order to free up the funds developing nations need to recover from the pandemic-related slowdown.
