The value of global trade rose to a record $7.7 trillion in the first quarter, an increase of around $1 trillion compared to the same period in 2021, according to the new United Nations Conference on Trade and Development’s (UNCTAD) “Global Trade Update.”
The growth, which represents a gain of about $250 million over the fourth quarter of 2021, was fueled by rising commodity prices, while trade volumes increased to a lesser extent, UNCTAD noted. While expected to remain positive, trade growth slowerd during the second quarter through June.
UNCTAD said 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.
According to the report, trade growth rates in the first three month sof the year remained strong across all geographic regions, although somewhat lower in the East Asia and Pacific. Export growth has been generally stronger in commodity-exporting regions.
Trade in merchandise goods reached about $6.1 trillion, an increase of about 25 percent year over year, and a jump of about 3.6 percent from the last quarter of 2021. The value of merchandise exports from developing countries was about 25 percent higher in the period over last year’s period.
Trade in services grew to about $1.6 trillion, an increase of about 22 percent relative to the first quarter of 2021 and a rise of about 1.7 percent over the previous three-month period.
The report revealed that most economic sectors recorded substantial year-over-year increases in the value of their trade in the quarter. High fuel prices were 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 remained below the levels of 2021 and 2019.
The report said the evolution of world trade for the remainder 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 war in Ukraine is also affecting international trade by putting further upward pressure on the international prices of energy and primary commodities. In the short term, due to the inelastic global demand for food and energy products, rising food and energy prices would likely result in higher trade values and marginally lower trade volumes.
Other factors expected to influence global trade this year are continuing challenges for global supply chains, regionalization trends and policies supporting the transition towards a greener global economy.