Record US$7.7 trillion trade value in first quarter surpassed by US$1 trillion the trade figure in the same quarter last year
UNCTAD report says rising interest rates and winding down of economic stimulus packages are likely to hit trade volumes for the rest of 2022
The impact of the Ukraine war is starting to influence international trade through increases in prices of food and fuel
Global trade rose to a record US$7.7 trillion in value in the first quarter of 2022, about US$1 trillion greater than in the same quarter last year, according to the “Global Trade Update” published on July 7 by the United Nations Conference on Trade and Development.
The growth, representing a rise of about US$250 million from the trade value in the last quarter of 2021, is fuelled by rising commodity prices, as trade volume growth lagged.
Though expected to remain positive, trade growth has continued to slow in Q2 2022.
“The war in Ukraine is starting to influence international trade, largely through increases in prices,” the report says.
It adds that rising interest rates and the winding down of economic stimulus packages will likely have a negative impact on trade volumes for the rest of 2022.
Volatility in commodity prices and geopolitical factors will also continue to make trade developments uncertain, UNCTAD said.
The report said trade growth rates in Q1 2022 remained strong across all geographic regions, although somewhat lower in the East Asia and Pacific regions.
Export growth has been stronger in commodity-exporting regions, as commodities have risen.
Trade in merchandise goods reached about US$6.1 trillion, up about 25% from Q1 2021, and up about 3.6% from Q4 2021.
The value of merchandise exports from developing countries was about 25% higher in Q1 2022 than in Q1 2021. In comparison, this figure is about 14% for developed countries.
Merchandise trade between developing countries also grew strongly in Q1 2022
Trade in services grew to about US$1.6 trillion, up about 22% over Q1 2021, and a rise of about 1.7% versus Q4 2021.
The report shows that most economic sectors recorded substantial year-over-year increases in the value of their trade in Q1 2022.
High fuel prices are behind the strong increase in the value of trade in the energy sector. Trade growth was also above average for metals and chemicals.
By contrast, trade in the transportation sector and in communication equipment has remained below the 2021 and 2019 levels.
The report says evolution of world trade for the rest of 2022 is likely to be affected by slower-than-expected economic growth due to rising interest rates, inflationary pressures and concerns over debt sustainability in many economies.
The report states that the war in Ukraine is affecting international trade by putting further upward pressure on the international prices of energy and prime commodities.
In the short term, due to inelastic global demand for food and energy products, rising food and energy prices would likely lead to higher trade values, and marginally lower trade volumes.
Other factors that should influence global trade this year are continuing challenges to global supply chains, regionalization trends and policies supporting the transition to a greener global economy.
