The World Trade Organization (WTO) announced this week that global trade in services registered a year-on-year increase of 25% in the third quarter of 2021.
According to what was provided by the WTO, digitally delivered services, such as IT services, financial services and services provided to businesses, were the main drivers of trade growth, as well as transport, which was boosted by rising maritime transport rates.
However, he noted that The increase does not yet represent a full recovery from pre-pandemic levels., as trade in services remains 5% lower than the levels recorded in the third quarter of 2019. The uneven distribution of vaccines, the emergence of new variants and border restrictions continue to affect international travel.
Facts & figures
The WTO published that the global transportation services, in particular, increased by 45% year-on-year in the third quarter of 2021 and by 12% compared to the same period in 2019. The recovery was driven by rising consumer demand for goods due to lockdowns, a shift to services requiring physical proximity, and fiscal stimulus measures in advanced economies. The surge in demand coupled with pandemic-related restrictions resulted in port bottlenecks, misallocation of containers around the world, and delays, leading to a sharp increase in shipping rates. In the third quarter of 2021, Asia’s transport exports increased by 71% year-on-year and by 46% compared to the third quarter of 2019.
In contrast, the recovery of passenger air transport continued to lag due to restrictions, remaining well below pre-crisis levels. Global spending by international travellers in the third quarter of 2021 grew by 54% year-on-year from a very low base in 2020. However, it remained 52% below the value of the third quarter of 2019, before the pandemic. European countries experienced the lowest declines (-32%) compared to pre-crisis levels, as travel restrictions were relaxed on the continent in the summer and cross-border movement was facilitated by COVID-19 vaccination passes. Travel exports from Asia, in comparison, were 81% below pre-pandemic values, as several countries remained closed. Cambodia, the largest exporter among least developed countries (LDCs), experienced a 97% drop in traveller spending. LDC travel exports in the first half of 2021 were 67 per cent lower than their value in the same period in 2019, according to preliminary estimates.
For its part, the WTO reported that “Other services”, such as construction, recreational, legal and financial services, increased by an average of 15% year-on-year in the third quarter of 2021. As a group, these services were less affected by the pandemic, with exports contracting by just 1% in 2020 on an annual basis. (WTO Press Release)
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