Global trade hit a record high in the first quarter of 2021, growing 10 per cent on the first quarter of last year as economies continue to recover from the pandemic, according to the UN Conference on Trade and Development .
The growth was driven by strong exports from East Asian economies, the UN agency said in its Global Trade Update report.
“The positive trends from the last few months of 2020 grew stronger in early 2021," Unctad said.
“Importantly, global trade in [the] first-quarter of 2021 was higher than pre-crisis levels, with an increase of about 3 per cent relative to first-quarter of 2019.”
China, India and South Africa fared relatively better than other major economies during the first quarter, the report said.
China’s imports and exports of goods grew 22 per cent during the first quarter, when compared to its 2020 average, the data showed. The export of goods from the world's second-largest economy also grew 20 per cent. Its import of services grew 3 per cent and its export of services by 27 per cent.
India, which is currently going through a devastating second wave of the coronavirus pandemic, registered a 45 per cent growth in the import of goods in the first quarter, relative to its 2020 average, while its export of goods increased 26 per cent. Imports and exports of services also rose during the period.
Other economies including the US, South Korea, the European Union and Japan also registered strong growth in trade during the period. The import of goods into the US, the world’s biggest economy, rose 14 per cent while exports increased 16 per cent.
“Looking forward, 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 Unctad report said.
The value of global trade in goods and services is forecast to reach $6.6 trillion in the second quarter of 2021, equivalent to a year-on-year increase of about 31 per cent relative to the same period last year, when lockdowns were at their height. The growth would also be about 3 per cent greater than pre-pandemic levels in the second quarter of 2019, it said.
The positive outlook remains largely dependent on reducing pandemic restrictions, a continued upward trend in commodity prices, supportive macroeconomic and fiscal conditions and few restraints from protectionist trade policies.
It also warned that additional borrowing by governments to sustain their economies during the Covid-19 crisis could result in financial instability, with rise in interest rates putting pressure on both sovereign and private borrowing, which would impact trade and investment flows – especially for developing countries.
Trade patterns in the first quarter 2021 varied across regions. While imports grew for all regions, the rebound in exports was largely confined to East Asian and Pacific economies, the report said.
The value of exports compared to the first quarter of last year was flat in the Middle East and South Asia and fell 2 per cent in Africa.
The economies of China and the US are expected to be the main drivers of global growth throughout 2021, which will have a positive effect on countries who trade most closely with them, such as East Asian countries, Canada and Mexico, Unctad said.
