According to a report by the Economic Commission for Latin America and the Caribbean (ECLAC) published on Tuesday (07.12.2021), international trade in the region will experience a significant recovery in 2021. The growth comes after a sharp decline observed last year. The recovery, however, will not be the same in all countries due to the uncertainty generated by the new coronavirus pandemic.
According to the report titled ““International trade outlook for Latin America and the Caribbean 2021”, this year there will be an increase of 25% in the value of regional goods exports after a 10% drop in 2020.
This increase is driven by a 17% rise in export prices and an 8% expansion in export volume.
The expectation for 2022 is a 10% increase in the value of regional exports of goods and a 9% increase in imports, even with lower growth in the regional and global economy.
South America recorded the largest increase in export value in 2021, 34%, benefiting particularly from higher commodity prices. In the Caribbean, the increase in exports is due to rising oil and gas prices.
The increase in exports of goods from the region during 2021 is mainly explained by theThe rise in commodity prices, especially minerals, oil and agro-industrial products, more than by the expansion of the export volume. Also by the Increased demand for imports in China, the United States and the European Union, and for the recovery of economic activity in the region itself"
Likewise, ECLAC shows that “regional services exports have not yet recovered from the fall suffered as a result of the pandemic.” And it points out that “in the area of trade in services, regional dependence on far exceeds the world average, so the uncertainty about the reopening of this sector negatively conditions the prospects of several economies, especially in the Caribbean."
“This worrying situation highlights the Urgency to deepen regional economic integration, especially in a global context in which the main economic powers are seeking to advance their own processes of commercial and productive regionalization. Moving towards an integrated regional market through the progressive convergence of the different subregional groups is essential not only to generate efficient scales of production and promote processes of productive and export diversification, but also to achieve greater autonomy in strategic sectors,” ECLAC highlights. To this end, it underlines an indispensable condition: “cooperation between national regulatory authorities in the health sector.”
Finally, the ECLAC report highlights several factors of uncertainty in world trade with consequences in the region, such as the uneven pace of vaccination and new strains of the virus; inflationary pressures and difficulty in maintaining fiscal stimulus; trade tensions and risks in China's real estate sector; interruptions in supply chains and rising freight rates.Latin America and the Caribbean Trade Outlook 2021: In Search of a Resilient and Sustainable Recovery)
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