Global Trade Undergoes a Strong, Yet Uneven, COVID Recovery
Global merchandise trade volume is expected to grow 8% this year after declining 5.3% in 2020. However, by 2022, trade growth is expected to slow to 4.0%, according to the WTO, meaning “the effects of the pandemic will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend.”
The recovery of global trade has been strong — but uneven. In the second half of 2020, trade in electronics grew 12% from the demand of remote workers. Textile trade also grew, matching the need for medical masks. Travel and transport services, however, dropped 63% and 19%, respectively, due to travel restrictions. Trade in fuel and mining products was also low at 19% in the fourth quarter of 2020.
Trade volume this year will ultimately depend on the production and distribution of vaccines. Delays in vaccine distribution or a resurgence of the virus could hinder trade growth by nearly 2 percentage points. But if COVID-19 is contained, trade could return to pre-pandemic levels by the end of 2021.