WTO forecasts trade growth at 10.8% in 2021

According to World Trade Organisation (WTO), global trade growth is expected to be 10.8% in 2021, up from its earlier forecast of 8%. Furthermore, WTO forecast expects the goods trade to grow by 4.7% in 2022. According to the international body, semiconductor scarcity, port backlogs, and other supply-side issues might strain the supply chain and impact global trade growth but large impacts from these issues are unlikely.

Forecast for global trade by WTO

The WTO said, “The current forecast is close to the upside scenario shown in the last trade forecast, but downside risks now predominate, including strained global supply chains and Covid-19 outbreaks.” Imports of Asia in 2021 are going to increase by 9.4% in 2021, in comparison to 2019. For Least-Developed Countries (LDCs), the imports are expected to fall by 1.6%.

Ngozi Okonjo-Iweala, WTO Director General, said inequitable access to vaccines is fueling to economic divergence, and thus the member countries should come together to deliver a “a strong WTO response to the pandemic”. She said, “The longer vaccine inequity is allowed to persist, the greater the chance that even more dangerous variants of Covid-19 will emerge, setting back the health and economic progress we have made to date.” According to the WTO report, services trade is expected to be behind goods trade, especially in travel and leisure-related sectors.

The global trade body said that due to a lower base, year-on-year growth in the second quarter of 2021 was 22%. It added that the figure is projected to fall to 10.9% in the third quarter and 6.6% in the fourth quarter. The WTO forecast attributes this to the rapid recovery in trade in the last two quarters of 2020. It expects export volume growth in 2021 will be 8.7% in North America, 7.2% in South America, 9.7% in Europe, 0.6% in the CIS, 7.0% in Africa, 5.0% in the Middle East and 14.4% for Asia.