NextGen Day

Global commerce growth remained strong this year amid the pandemic but the outlook for 2022 is still “very uncertain” because of a stalling economic recovery and disruptions of logistic networks and rises in shipping prices.

A report of the United Nations Conference on Trade and Development (UNCTAD) claimed the rapid economic recovery of the first half of 2021 slowed down during the second half, with the economic growth of China in the third quarter below estimates and lower than in prior quarters.

“Lower than predicted economic growth rates are often reflected in more downcast global trade trends. Rising commodity prices and inflationary pressures may further negatively affect economic prospects and international trade flows,” the Global Trade Update said.

The research noted many economies, particularly those in the European Union, continue to endure coronavirus disease 2019 (Covid-19)-related difficulties.

“These interruptions may significantly affect consumers’ demand and ultimately be reflected in trade figures for the future quarters,” it added.

The UNCTAD also ascribed this year’s prognosis to disruptions of logistic networks and increases in shipping costs.

It said the rebound this year has been defined by huge and unpredictable swings in demand, which have resulted in increased stress on supply networks.

“Logistic difficulties and high fuel prices have further led to supply shortages and spiraling shipping costs. In particular, the backlogs across major supply chain hubs that have defined most of 2021 could extend into 2022 and hence significantly effect trade and distort trade flows across the world,” the researchers noted.

Other issues identified are worldwide semiconductor shortage, geopolitical factors and the regionalization of trade flows, governmental regulations affecting international commerce, and financial loads.

The UNCTAD stated global commerce is estimated to reach roughly US$28 trillion in 2021, suggesting an increase of 23 percent compared to 2020.

“Trade in products is estimated to reach a record level of US$22 trillion in 2021. Trade in services should be worth about US$6 trillion in 2021, still significantly below its pre-pandemic level,” it said.

The research attributed the good trajectory for international commerce this year mainly to the strong recovery in demand due to decreasing pandemic restrictions, economic stimulus packages, and improvements in commodities prices.

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