New Delhi, February 17

Global trade in goods and services touched a record high of $28.5 trillion in 2021 boosted by increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages, according to UNCTAD.

The growth recorded in global trade in 2021 was about 25 per cent relative to 2020 and 13 per cent compared to the pre-pandemic levels but is expected to slow in the first quarter of 2022, the Global Trade Update 2022 released by the UNCTAD on Thursday pointed out.

“The positive trend for international trade in 2021 was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages. As these trends are likely to abate, international trade trends are expected to normalise during 2022,” the report stated.

Outlook for 2022

Overall, world trade in 2022 is likely to be affected by factors such as slower than expected economic growth, continuing challenges for global supply chains, rising concerns about debt sustainability, free trade agreements and government policies regulating the trade of high-carbon products, it added.

The slowdown in growth of global trade expected in 2022 is, however, not likely to have a strong bearing on Indian exports, said Ajay Sahai, Director General, FIEO. “India accounts for a small proportion of the total world trade and is unlikely to be affected by the predicted slowdown as there are other factors acting in favour,” he said. Indian exports are likely to stay on the growth track supported by the various free trade agreements being signed such as with the UAE and the UK and also the implementation of the Production-Linked Incentive scheme in various sectors, he added.

India’s exports rebounded in the April-January 2021-22 period posting an increase of  46.73 per cent to $335.88 billion over the comparable period of 2020-21, inching closer to the target of $400 billion set for fiscal 2021-22 by the Commerce Department.

Trade in goods increased more strongly for developing than for developed countries in Q4 2021. Exports of developing countries in Q4 2021 were about 30 per cent higher than in Q4 2020, while the growth for developed countries was about 15 per cent.

“Moreover, trade growth between developing countries (South-South) outpaced global trade during Q4 2021, with an increase of about 32 per cent relative to Q4 2020, and with an increase of about 38 per cent when excluding East Asian economies. Similar patterns are found when comparing Q4 2021 with the pre-pandemic level,” the report stated.

Sector-wise growth

With the exception of transport equipment, all economic sectors saw a substantial increase in trade in Q4 2021. High fuel prices led to strong increase in the value of trade of the energy sector. “Trade growth was also above average for metals and chemicals. As a result of the global shortage of semiconductors, trade growth in communication equipment, road vehicles and precision instruments was subdued during Q4 2021,” it added.

Trade in goods and trade in services followed similar patterns during 2021, with stronger increases during the first half of the year. Trade growth continued to be positive for both goods and services in Q3 2021 and especially in Q4 2021.

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