World merchandise trade volumes should increase by 8% in 2021, according to the latest estimates of the World Trade Organization (WTO) published on Wednesday 31 March. In 2020, merchandise trade fell by 5.2%, instead of the 9.2% initially forecast by the WTO.
The organisation considers that three main factors have driven the recovery in the second half of 2020. Government interventions, including a major stimulus package in the US, have supported spending, according to the WTO. This is followed by household and business adaptation to the health situation and effective crisis management in China and other Asian countries.
The WTO has considered two scenarios for its 2021 recovery forecast:
- an optimistic scenario, with an acceleration of vaccine production and distribution. Under this scenario, world GDP growth could increase by one percentage point, world trade growth could increase by 2.5 percentage points to return to the pre-pandemic trend by the fourth quarter of 2021.
- in the pessimistic scenario, on the other hand, slower vaccine production affects GDP growth, which could fall by one percentage point by 2021. Growth in trade, on the other hand, would fall by two points.
Regional disparities
The WTO forecasts less sustained growth starting in 2022 (4%), with particular regional disparities.
South America, for example, will see its exports increase by only 3.2% in 2021, while those of North America, the EU, Africa and the Middle East will increase by more than 7%. The Commonwealth of Independent States will only see an increase of 4.4%.
The urgency of vaccines for recovery
In presenting the new forecasts, WTO Director General Ngozi Okonjo-Iweala stressed the urgent need to accelerate vaccine production and distribution worldwide to boost economic recovery. “Accelerated vaccinations would raise trade growth up to 2.5 percentage points above the baseline forecast in 2021 - returning trade to the pre-pandemic trend. On the other hand, if supply shortages continue, or if vaccine-resistant strains of the virus emerge, trade growth could end up two percentage points below the baseline forecast”, she warned. She therefore called on the international community to “harness the power of trade to expand access to vaccines”.
See the forecast: https://bit.ly/2QNfqM3 (Original version in French by Léa Marchal)