The United Nations Conference on Trade and Development (UNCTAD) has released an analysis of trade statistics for the fourth quarter (Q4) of 2020, complemented by a short-term forecast for the first quarter (Q1) of 2021. The update notes signs of recovery in global goods trade in the fourth quarter of 2020, while “trade in services continues to lag”.
The UNCTAD document, entitled "Global Trade Update: February 2021", shows that Global trade as a whole fell by 9% in 2020, while trade in goods fell by 6% and trade in services fell by 16,5%In the fourth quarter, global trade in goods grew by around 8% quarter-on-quarter, while trade in services remained at the levels of the third quarter of 2020.
Merchandise trade has been largely driven by East Asian economies, which appear to be leading the way through strong export growth as well as overall gains in global market share. However, UNCTAD projects a slowdown in the recovery of trade in goods in the first quarter of 2021, forecasting a fall of 1,5% compared to the fourth quarter of 2020. In addition, continued disruptions in the travel sector will keep services trade depressed, with UNCTAD expecting a 7% drop in such trade activity in Q1 2021 relative to Q4 2020.
That is UNCTAD shows import and export trends of major trading economies in goods and services in the first half of 2020, as well as in the third and fourth quarters. While Imports and exports of both goods and services experienced a universal (and precipitous) decline in the first half of the year, with China and a handful of other economies returning to positive quarterly trends.
The update attributes the recovery in goods trade at the end of 2020 in part to developing economies, as South-South trade outpaced global trade. However, UNCTAD warns that “positive trade growth in developing countries in the fourth quarter of 2020 disappears once East Asian economies are excluded.” The update stresses that despite the positive outlook, trade in goods has not recovered in most regions.
Analysing recoveries in specific sectors, UNCTAD finds that most have started to recover, with the exception of the energy and transport equipment sectors. The strongest sectoral recoveries in the third and fourth quarters have been driven by COVID-19-related products, notes UNCTAD, including textiles due to the increased need for personal protective equipment, and office equipment for remote employees working from home, among others.
To measure competitiveness in the wake of COVID-19, the update also looks at countries' export performance and volatility. But it notes that it is still too early to fully assess the implications of the pandemic on each country's export capacity.
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