International trade returned this year as an engine of the world economy, after not achieving that function in the last three years, according to data from the World Trade Organization (WTO).
The last time foreign trade grew more than world GDP was in 2017, when the volume of trade flows increased 4.8% and world production rose 3.2%. The following year, both variables grew in parallel, to 3.1 percent. Then trade had poorer results: it grew 0.1% against 2.4% of GDP in 2019 and fell 5.3% against a decline of 3.5% of GDP.
Now GDP growth has been driven by sustained fiscal and monetary policy support in advanced economies and in developing economies with sufficient fiscal space.
Governments in low-income countries have fewer resources to protect households and businesses from pandemic-related crises, and have experienced weaker recoveries as a result.
By 2021, the WTO projects that international trade will grow 10.8% (with a rise in GDP of 5.3%); and for 2022, it estimates an advance of 4.7% (with a GDP increase of 4.1 percent).
The WTO indicated that risks to the forecast are predominantly to the downside. These include port congestion, rising shipping rates, and a shortage of semiconductors.
The combination of supply-side disruptions and strong demand for goods may also be contributing to inflation, which has reached multi-year highs in some advanced economies.
However, the WTO added, the Covid-19 pandemic still poses the greatest threat to global trade and production. Certain trade-related indicators can provide some clues as to the severity of recent supply disruptions.
Reference-www.eleconomista.com.mx