Geneva, 22 February 2022 (TDI): The United Nations Conference on Trade and Development (UNCTAD) predicts that global trade is likely to subdue in 2022, after hitting a record high of $28.5 trillion in 2021.
Most economies around the world observed an increase in their trade but the greatest increase was seen in developing economies.
Exports of developing countries were 30% higher than in developed nations. Higher growth was observed in commodity-exporting regions as the prices of commodities have gone up significantly.
“High fuel prices are behind the strong increase in the value of trade of the energy sector, trade growth was also above average for metals and chemicals.” -says the report
Year-over-year all sectors, except for transport equipment saw an increase. Due to a worldwide shortage in global semiconductors trade in communication equipment and certain electronics and vehicles decreased.
UNCTAD predicts that growth will remain slow during the first quarter of 2022 saying that positive trade trends in 2021 were largely due to an increase in commodity pricing.
However, subsiding pandemic restrictions and strong recovery in demand due to stimulus packages is likely to cause these trends to abate which will ultimately cause trade trends to normalize in 2022.
The IMF recently revised its world economic growth forecast and lowered the growth rate by 0.5%, this was mainly caused by developments in China’s real estate sector and persistent increase in inflation in the United States.
Additionally, supply chain disruptions and rising energy prices have also contributed to the downward trend. Increasing inflation is also causing upward pressure on the debt sustainability of developing economies
“A significant tightening of financial conditions would heighten pressure on the most highly indebted governments, amplifying vulnerabilities and negatively affecting investments and international trade flows,” -says the report
Trade patterns in 2022 are increasing demand for products that are environmentally sustainable which also adds a level of concern as far as the environment is concerned.
