Painting an optimistic picture for exporters, the World Trade Organisation has revised upwards its prediction for global merchandise trade volume growth in 2021 to 8 per cent compared to the 7.2 per cent growth forecast in October 2020.

“Trade growth should then slow to 4 per cent in 2022 and the effects of pandemic will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend,” indicated the WTO’s most recent forecast on March 31.

Prospects for Indian exporters may even be brighter as North America, one of India’s top export markets, is projected to drive the growth in demand with an estimated 11.4 per cent increase in imports while demand in the EU, another big buyer of Indian goods, is likely to grow at 8 per cent.

Moreover, much of global import demand will be met by Asia, exports from which are expected to grow by 8.4 per cent in 2021, the report said.

Indian exporters have recently indicated that there has been a growth in enquiries and fresh orders from buyers in key Western markets although goods exports in fiscal year 2020-21 is set to be about 8-10 per cent lower than last fiscal’s figure of $314 billion.

The report, however, cautioned that Covid-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any anticipated recovery.

The decline in volume of world goods trade for 2020, too, has been pared to 5.3 per cent compared to a 9.2 per cent fall projected earlier.

"The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses, and economies," WTO Director-General Ngozi Okonjo Iweala said. "Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need," she added.

The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries, the report said.

World GDP at market exchange rates should increase by 5.1 per cent in 2021 and 3.8 per cent in 2022, after contracting by 3.8 per cent in 2020, the report pointed out.

Falling oil prices led to a 35 per cent contraction in trade in fuels in 2020 while travel services were down 63 per cent in 2020 and are not expected to fully recover until the pandemic wanes.

"Ramping up production of vaccines will allow businesses and schools to reopen more quickly and help economies get back on their feet. But as long as large numbers of people and countries are excluded from sufficient vaccine access, it will stifle growth, and risk reversing the health and economic recovery worldwide," she said.

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