The high global trade growth in 2021 is expected to moderate in 2022 while supply chain disruptions are expected to continue for at least the first six months of the year. This is according to maritime analysts at IHS Markit who are anticipating that year-on-year the real value of global trade will rise 12.6% in 2021 but only 4.3% in 2022.This comes as the Covid-19 pandemic continues to be the most prominent driver of the current global economic situation. The impact of the pandemic on the world remains unpredictable, and significant uncertainty has developed in the trade environment over the past two years.“The overall impact of Covid-19 on worldwide trade and the global economy will depend on the duration, severity, and spatial distribution of the pandemic, and it will be directly linked to the severity of containment efforts taken by individual states. The reaction of states is mainly related to the capacity of their health systems to cope with the numbers of incoming patients (hospitalisations) and the corresponding number of reported deaths, showing to some extent the incapacity of health systems to manage,” reads an IHS Markit report.The outbreak of the new Omicron variant of the coronavirus has only brought further uncertainty and it’s expected that it could adversely affect economic activity in the first quarter of the year.“Covid-19 still exerts an adverse impact on international trade f lows, however the effect is slowly diminishing in magnitude,” the report states.According to the World Trade Organization (WTO), the resurgence of global economic activity in the first half of 2021 lifted merchandise trade above its pre-pandemic peak. It has now predicted that world merchandise trade volume growth will be 10.8% in 2021, but like IHS Markit the organisation is anticipating a slowdown in 2022, saying trade growth should slow to 4.7% this year.Growth, reads a statement, should moderate as merchandise trade approaches its pre-pandemic long-run trend. Supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains and weigh on trade in particular areas, but they are unlikely to have large impacts on global aggregates. The biggest downside risks come from the pandemic itself.But, said Ngozi Okonjo-Iweala, WTO director-general, behind the strong overall trade increase, there was significant divergence across countries, with some developing regions falling well short of the global average.“Trade has been a critical tool in combatting the pandemic, and this strong growth underscores how important trade will be in underpinning the global economic recovery. But, inequitable access to vaccines is exacerbating economic divergence across regions. The longer vaccine inequity is allowed to persist, the greater the chance that even more dangerous variants of Covid-19 will emerge, setting back the health and economic progress we have made to date.”
