In the first quarter of 2021, the trade recovery around the world from the COVID-19 crisis hit a record high, increasing by 10 per cent year-over-year and 4 per cent quarter-over-quarter, according to UNCTAD. In addition, it stated economies like China, India and South Africa fared better than major economies.
The report pointed out that this is completely opposite to what was seen in 2015 and 2009 recession.
It took 13 quarters for global trade to recover from the 2015 recession, "which resulted from structural changes in East Asian economies and declines in commodity prices, and nine quarters to bounce back from the 2009 recession caused by the global financial crisis", the report stated (check graph below).
UNCTAD economist Alessandro Nicita said it took four quarters after the start of the pandemic-induced recession for world trade to return to pre-recession levels. By the fifth quarter – Q1 2021 – global trade was higher than pre-crisis levels, with an increase of about 3 per cent relative to Q4 2019.
“China, India and South Africa fared relatively better than other major economies during Q1 2021,” stated UNCTAD’s global trade update report.
The report stated China’s exports registered a strong increase not only from 2020 averages but also in relation to pre-pandemic levels. “In contrast, exports from Russia remained well below 2019 averages.”
It also stated that the overall trade continues to rebound more strongly for developing countries compared to developed countries. However, "the trade recovery for developing countries becomes much more muted when East Asian economies are excluded and disappears when only exports are considered".
According to the report, the rebound in Q1 2021 continued to be driven by East Asian economies. This was mainly driven by the early success these economics had while tackling the COVID-19 pandemic. This mitigation allowed them to rebound faster and to capitalise on booming global demand for COVID-19 related products.
In Q1 2021, the value of merchandise imports and exports of developing countries is substantially higher compared to Q1 2020 and also to Q1 2019 (by about 16 per cent).
“Global trade has recorded a faster recovery from the recession caused by the pandemic than in the last two trade recessions,” said Nicita, who worked on the report.
The report says in Q1 2021 the value of trade in goods was higher than pre-pandemic level, but trade in services remains substantially below averages. “Global trade in COVID-19-related products remained strong during the quarter,” it says.