Global merchandise trade growth
may not be sustainable, says WTO
World Trade Organization (WTO) said the high rate of global merchandise trade
growth (in volume) during the fourth quarter of 2020 is unlikely to sustain in
the first half of 2021 since key indicators appear to have already peaked.
may have repercussions on exports from India which have started recovering of
late, say experts.
to the latest Goods Trade Barometer of the WTO, the growth rate remained strong
in the fourth quarter of 2020 after trade rebounded in the third quarter from a
deep Covid-19-induced slump.
barometer's current reading of 103.9 is above both the baseline value of 100
for the index and the previous reading of 100.7 in last November. This signals
a marked improvement in merchandise trade since it dropped sharply in the first
half of last year.
component indices are either above trend or on trend, but some already show
signs of deceleration while others could turn down in the near future, WTO
the indicator may not fully reflect resurgence of Covid-19 and the appearance
of new variants of the disease, which will undoubtedly weigh on goods trade in
the first quarter of 2021, according to the WTO.
said prospects for 2021 and beyond are increasingly uncertain due to the rising
incidence of Covid-19 worldwide and the emergence of new variants.
will depend to a large extent on the effectiveness of vaccination efforts, it
said. Devendra Pant, chief economist at India Ratings, said weakness in the
global demand will have an impact on Indian exports.
export performance last year will have some impact on growth in 2021. Absence
of a strong global demand is one of the factors for weak growth performance of
the economy in the past few years, he said.
said it will be challenging for the Indian economy to sustain higher economic
growth in the absence of a strong global demand.
Nayar, principal economist at ICRA, however, said she expected merchandise
exports to strengthen as vaccine roll out gathers pace across nations.
from India picked up in December 2020 and January 2021 after decline in most
months of 2020 due to Covid and slowdown in global demand before that. Exports
grew 6.16 per cent in January and a moderate 0.14 per cent in December.
www.business-standard.com dt. 23.02.2021