2022 is the third year of the ongoing Covid-19 pandemic and new variants of coronavirus including Omicron, which has spread around the world and slowed down the global economy. The ongoing supply chain restrictions due to Omicron is unlikely to improve in H1 of 2022, and the situation may improve in the second half only. 2021 was marked by rapid recovery from the dramatic 2020 resulting from the initial outbreak in Q1 of 2020. Q2 of 2020 proved to be the worst quarter for global trade on record, but things started to improve relatively fast. The growth rates peaked in Q2 of 2021 and then moderated. Let’s try to analyze global trade in 2020, 2021, and what will be next in 2022.
Global Trade Outlook 2020
According to the global trade database, global exports fell down sharply in 2020 as compared to the previous year, while global imports also declined due to Covid-19 supply chain restrictions. Countries around the world were experiencing problems in importing and exporting goods all over the world.
In terms of global imports and exports, the two top economies the United States and China reported a decline in values during 2020 as compared to the previous year due to the Covid-19 pandemic. Here is a list of the top 10 global importer and exporter countries with their trade values recorded in 2020.
Global Trade Outlook 2021
Q2 of 2020 was the worst quarter for global trade when major economies including the United States reported a sharp decline in the value of imports and exports. The recovery only started from Q3 of 2020 and peaked in Q2 and Q3 of 2021. For example, the U.S. imported goods worth US$ 524 billion in Q2 of 2020, a decline as compared to the previous year. That dollar amount reached US$ 656 billion in 2021-Q1, US$ 724 billion in 2021-Q2 and US$ 756 billion in Q3-2021.
As far as exports are concerned, supply chain recovery started from Q3 of 2020, which peaked in Q2 & Q3 of 2021. For example, U.S. exports declined to US$ 289 billion in 2020-Q2, as compared to the previous year, and increased to US$ 436 billion in 2021-Q2 and US$ 434 billion in 2021-Q3. The real assessment of global trade outlook 2021 can only be made after gathering complete data of 2021 reported by countries worldwide.
Supply Chain Disruptions Unlikely to Subside in H1 2022
The overall impact of Covid-19 and Omicron on worldwide trade and the global economy in 2022 will depend on the duration, severity, and spatial distribution of the pandemic and directly linked to the severity of containment efforts taken by individual countries. Following are the factors that create problems in both the demand and supply side at the time of health crisis including the Covid-19 pandemic.
- Demand Side: lower consumer confidence, delayed consumption, lower incomes, and so on.
- Supply Side: lockdowns, forced production stoppages, disrupted global value chains, etc.
The full impact of Omicron will be known only within several weeks when we will understand the severity of the mutation. Nonetheless, it is likely to impact global economic activity in Q1 2022; the variant potentially could become an adverse game-changer.
There are also some qualitative factors that could affect global trade in 2022. For example, as of 2 November 2021, the ASEAN Secretariat has received Instruments of Ratification/Acceptance of the Regional Comprehensive Economic Partnership (RCEP) Agreement from six ASEAN Member States – Brunei Darussalam, Cambodia, Lao PDR, Singapore, Thailand, and Vietnam – as well as from four non-ASEAN signatory States – Australia, China, Japan, and New Zealand.
South Korea ratified the agreement last month, while four countries haven’t ratified yet – Indonesia, Malaysia, Myanmar, and the Philippines. RCEP is the world’s most significant regional trade agreement regarding GDP & population. RCEP’s countries currently account for about 29% (USD 25.8 trillion) of global gross domestic product and approx. 29% (2.3 billion) of the world’s population.
To provide actual insight, we have to see how things move on in Q1 of 2022 and global trade data will be recorded and reached to us. For that, keep relying on us for every update on international trade developments in this pandemic situation and access import-export data online with actual shipment records.