WTO says 2021 global trade recovery rests on vaccines

Geneva: Global trade is set to grow by eight percent in 2021, the World Trade Organization said Wednesday, stressing that the route out of the Covid-19 crisis rested on the rapid rollout of vaccines.

The predicted bounce-back in global merchandise trade by volume is slightly stronger than the WTO's previous 7.2 percent forecast issued in October.

The organisation said global trade shrank by 5.3 percent in 2020 as the coronavirus pandemic shocked the world economy.

"The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses, and economies," said the WTO's new boss Ngozi Okonjo-Iweala.

The global trade body's assessment of the Covid-19's impact on 2020 trade is nowhere near as bad as had been first predicted when the pandemic broke out.

A year ago, the WTO had cautioned that global trade could plummet by a third in 2020 but gradually revised that estimate to an expected 9.2-percent drop.

It said strong monetary and fiscal policies were the main drivers behind the smaller-than-expected contractions in growth and trade.

"Prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year," the Geneva-based organisation said.

While the rebound this year will be stronger than expected, growth is forecast to slow to 4.0 percent in 2022, the WTO said.

It warned that the effects of the Covid-19 crisis "will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend".