Global Trade Outlook for 2022 ‘Very Uncertain’

Despite trade growth remaining strong this year, the outlook for 2022 is very uncertain due to the slow economic recovery, high shipping costs, and logistics disruptions.

According to a report by the United Nations Conference on Trade and Development (UNCTAD), the economic recovery has slowed down in the second half of the year.

The report also said that there are still many countries affected by the disruptions brought by the pandemic. These disruptions affect customers demand and also affect the trade statistics for the upcoming quarters.

Attributed to the uncertain trade outlook in next year is the high shipping costs.

“Logistic disruptions and high fuel prices have further contributed to supply shortages and spiraling shipping costs. In particular, the backlogs across major supply chain hubs that have characterized most of 2021 could continue into 2022 and therefore negatively affect trade and reshape trade flows across the world,” the report also said.

The global semiconductor shortage, geopolitical factors and the regionalization of trade flows, governmental policies affecting international trade, and debt burdens are also cited in the report.

Moreover, UNCTAD expects the global trade to reach around US$28 trillion this year — 23% higher compared to 2020.

According to the report, the global trade’s improvement is attributed to the recovery in demand due to subsiding pandemic restrictions, economic stimulus packages, and increases in commodity prices. (ASC)