The World Trade Organization (WTO) has forecast that 2021 will see a strong rebound from the difficulties faced last year, but the effects of COVID-19 will continue to be felt, leaving global trade volumes still short of pre-pandemic levels.
It estimated that overall, trade growth for the year as a whole should reach eight percent, boosted by a quicker than expected recovery for merchandise trade in the second half of 2020. Trade volume in 2020 fell by 5.3 percent, which was a smaller decline than previously expected.
Following this boost, growth is expected to slow to four percent in 2022. This will mean world GDP should increase by 5.1 percent in 2021 and 3.8 percent in 2022, recovering from a decline of 3.8 percent in 2020.
However, the organization noted COVID-19 continues to be the greatest threat for world trade outlooks, with the relatively positive short-term view being held back by regional disparities, continued weakness in services trade, and lagging vaccination timetables.
WTO director-general Ngozi Okonjo‑Iweala said the strong rebound for global trade has helped soften the blows caused to people, business and economies by the pandemic, but there is still work to be done.
"Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need," she continued.
The WTO highlighted several factors that meant world trade held up better than expected through the pandemic, including the adoption of strong monetary and fiscal policies by many governments.
"Much greater in scale and geographic coverage than the response to the 2008-09 global financial crisis, these policies helped prevent a larger drop in global demand, which would have reduced trade further," the body stated.
It also praised the restraint shown by WTO members when it came to trade policies, which has generally prevented a rise in protectionism from hindering world trade.