The volume of world trade has recovered from the downturn caused by Covid-19 to reach pre-pandemic levels at the end of 2020.

According to data from the Netherlands Bureau for Economic Policy Analysis, the total volume of goods traded rose by 2.1 per cent month-on-month in November, taking it above the level recorded in December 2019, the Financial Times (FT) reports.

This expansion in trade was fueled mainly by increased demand for imports in advanced economies. China was one of the main beneficiaries of this, with the Asian nation registering a 5.6 per cent month-on-month growth in exports. However, its import volumes fell over the same period.

Other data also revealed that China became the biggest trading partner for the EU in the first 11 months of 2020, supplanting the US.

While this upturn preceded the latest upsurge in Covid-19 cases in many developed countries and the resulting new round of lockdowns on other restrictions, economists are optimistic that these headwinds will not overly dampen trade this year.

Adam Slater, lead economist at Oxford Economics, told the FT: "Despite renewed restrictions in a number of economies in recent months, the growth rate of trade in 2021 will be strong". 

He predicted world trade volumes would expand by around nine per cent in 2021, following a drop of seven per cent last year.

However, several challenges remain for global trade markets. A shortage of shipping containers and an associated increase in the cost of seaborne trade, could limit volumes in the months ahead, for example.