Trade in goods during the first quarter of 2021 was higher than the pre-pandemic level, but trade in services remained substantially below averages.
World trade’s recovery from the COVID-19 crisis hit a record high in the first quarter of 2021, increasing by 10% year-over-year and 4% quarter-over-quarter, according to UNCTAD’s Global Trade Update released on 19 May.
According to the report, the impressive rebound in Q1 2021 continued to be driven by the strong export performance of East Asian economies, whose early success in pandemic mitigation allowed them to rebound faster and to capitalize on booming global demand for COVID-19 related products.
“Global trade has recorded a faster recovery from the recession caused by the pandemic than in the last two trade recessions,” said UNCTAD economist Alessandro Nicita, who worked on the report.
He said it took four quarters after the start of the pandemic-induced recession for world trade to return to pre-recession levels. By the fifth quarter – Q1 2021 – global trade was higher than pre-crisis levels, with an increase of about 3% relative to Q4 2019.
By contrast, it took 13 quarters for global trade to recover from the 2015 recession, which resulted from structural changes in East Asian economies and declines in commodity prices, and nine quarters to bounce back from the 2009 recession caused by the global financial crisis.
The report says in Q1 2021 the value of trade in goods was higher than pre-pandemic level, but trade in services remains substantially below averages. “Global trade in COVID-19-related products remained strong during the quarter,” it says.
According to the report, import and export trends for some of the world’s major trading economies show that with a few exceptions, trade in major economies recovered from the fall of 2020.
However, the large increases are due to the low base for 2020, and trade in many of the major economies was still below 2019 averages. The trend of a stronger recovery for goods relative to services is common to all major economies, the report finds.
It shows that China, India and South Africa fared relatively better than other major economies during Q1 2021.
China’s exports, in particular, registered a strong increase not only from 2020 averages but also in relation to pre-pandemic levels. In contrast, exports from Russia remained well below 2019 averages.
Trade recovery remains uneven, the report notes, especially among developing countries, with exports from East Asia rebounding substantially faster.
East Asian economies are also behind the recovery of trade among developing countries (South-South trade). When trade figures from East Asian developing economies are excluded, South-South trade remains below averages.