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Strong recovery in global trade evident fueled by rising
market optimism, nonetheless, the pandemic is still not under
control and could endanger the global economy.
Main Observations
Exports have increased for China in 2020 by 4.0% year-on-year
and declined in all other top ten economies, with the largest
declines reported for India (-14.8%), the UK (-15.2%) and Russia
(-19.2%)
Q1 2021 brings a clear rebound in particular for East Asia, and
a more adverse situation for the UK, US and Russia; exports of the
top ten outperformed imports
Chinese exports grew for the tenth month in a row. It is the
fifth month in a row for South Korea, and the fourth one for Japan,
which indicates that the recovery in East Asia is broad and is
leading the global recovery; on the other extreme, American and
British exports are declining for 12 or more months in a row
The cumulative number of confirmed cases of COVID-19 globally
by April 29, 2021, reached 149.6 million and 3.15 million deaths;
the 2-week moving averages of global new cases and deaths are still
rising with variants spreading fast in Brazil and India; the
COVID-19 pandemic is ongoing and could endanger global recovery if
the situation escalates; only 3.3% of the global population are
vaccinated with two doses by now
The adjusted PMI NExO readouts for the global manufacturing
industry in March 2021 were above the benchmark value of 50.0
points (53.38, a rise of +2.38 point on the February 2021 readout)
and nine out of the top ten economies. The only country to report
the PMI NExO below the benchmark value is Russia; EU-27, in turn,
had the highest readout of 62.43 in March 2021
We foresee a global recovery in 2021 with year-on-year real GDP
growth rates predicted to reach 5.3% (4.3% in 2022) - adjusted
upwards for 2021 by 0.2% in comparison to the March release. The
growth rates are predicted to vary between 4.8% (3.9 in 2022) for
advanced, 6.2% (5.0%) for emerging, and 4.9% (4.7%) for developing
states; five out of the top ten economies were growing in Q1 2021
and the recovery should be visible in all top ten economies in Q2
with the highest growth boost forecasted for India and the UK (the
worst performer in Q1)
Changes in Trade of the Top Ten Economies
With the new trade data updated regularly in our Global Trade Atlas as reported
by the states (adjusted for Brazil in April 2021 for the whole of
2020), we have the final estimates of the total contraction in
trade in 2020 for the top ten economies
Chinese exports have increased in 2020 by 4.0% year-on-year -
the contraction was present only in Q1 (-13.4% followed by a steady
recovery: +0.1% in Q2, +8.8% in Q3, and +17.1% in Q4. All other top
ten economies suffered a contraction in exports in 2020 which
varied from -5.5% for South Korea, -6.9% for Brazil, -7.2% in the
EU, -9.1% in Japan, -12.5% in Canada and -12.9% in the case of the
U.S.; the largest declines were present in India (-14.8%), the UK
(-15.2%) and Russia (-19.2%)
In January 2021 most top ten economies reported year-on-year
growth in the value of exports varying from +3.5% for Brazil to
80.5% for China; the U.S. (-1.1%), EU (-1.6%), Russia (-15.8%), and
the UK (-25.4%) reported a year-on-year decline; please take into
account that the figures for China (mainland) partially reflect the
way the trade data for January-February were reported in 2020 and
2021 as well as the impact of the pandemic starting earlier than
for the remaining top ten economies
In February most top ten states reported once again a
year-on-year growth in the value of exports varying from 0.1% for
Japan to +40.0% for China; with declines reported at this stage by
the UK (-0.5% yoy), Russia (-3.1%), and the U.S. (-6.1%)
As could have been expected, exports for all the countries that
have already reported data for March 2021, grew year-on-year by
16.2% for Japan and South Korea (+16.5%), China (+30.2%), and
Brazil (+33.2%)
Chinese exports grew for the tenth month in a row. It is the
fifth month in a row for South Korea, and the fourth one for Japan,
which indicates that the recovery in East Asia is broad and is
leading the global recovery; the establishment of the RCEP in 2021
could strengthen the role of the region in global trade (two
countries have already ratified the Agreement - Thailand and
China)
On the other hand, American and British exports are declining
for 12 or more months in a row
Japanese and Brazilian exports have grown for two months in a
row, the upturn is more sustained in South Korea (the fourth month
of increases); the situation is serious in the UK - the last
year-on-year increase in the value of exports was reported in
January 2020 (pre-COVID)
The UK seems to be struck the most out of the top ten group,
apart from Russia, a combined effect of COVID-19 and harsh
lockdowns related to the spread of the British variant and Brexit
as well as disappointment with only partial successful negotiations
on the UK-EU trade agreement; the success of mass vaccination in
the UK is though likely to bring a turn around in the upcoming
months with the uncertainty over mid-run effects of Brexit starting
to affect the situation of both the UK and EU-27
In contrast to exports, in all top ten economies imports
contracted year-on-year in 2020; the decline varied from -0.4% for
China to -23.3% in India; at the same time for most of the states
the contraction in imports was deeper than the contraction in
exports
All top ten economies reported contraction in imports in Q1 and
Q2 of 2020; in Q3 imports were growing only in the case of China;
in Q4 2020 imports were above 2019 levels in most of the top ten
states apart from EU (-1.1% year-on-year), South Korea (-1.7%),
Russia (2.4%), India (-4.9%) and Japan (-8.2%); imports were
growing the fastest in the UK (+7.8%)
In January 2021, imports were growing year-on-year in India
(+1.9%), South Korea (+3.6%), the U.S. (+4.3%), Russia (+6.0%), and
China (+32.6%) and declined in the remaining top ten economies with
the largest declines reported year-on-year for Brazil (-10.7%) and
the UK (-14.1%)
In February 2021, imports were growing year-on-year in all
countries (that have reported data) apart from the UK (-9.8%) with
the largest gains in South Korea (+14.1%), Russia (+16.0%), and
Japan (+16.5%)
All countries that have reported data for March 2021 are
showing increases ranging from +5.1% for Japan, +18.8 for South
Korea to +25.2% for Brazil, and +37.6% for China
Chinese imports are growing the seventh month in a row which
proves the deep nature of the recovery, it's the 4th month in a row
for South Korea and the second for Japan; this could be indicative
of growing consumer confidence and increasing internal demand
strengthening the likelihood for sustained recovery
Prospects for the Forthcoming Months
The reaction in trade in 2020 was consistent with the
escalating global COVID-19 pandemic and steps taken by individual
countries/territories in controlling or mitigating it. The
situation in 2021 is likely to be similar with the development
dependent on the success of mass vaccination programs and the
severity of the third and potentially next waves. This is the key
differentiator between the four different scenarios of the World
Bank's Global Economic Outlook from January 2021 and an element
embedded in the baseline macroeconomic scenario of IHS Markit
The overall impact of COVID-19 on global trade and the global
economy will depend on the duration, severity, and spatial
distribution of the pandemic and associated severity of containment
efforts taken by individual states.
The cumulative number of confirmed cases of COVID-19 globally
by April 29, 2021, reached 149.6 million and 3.15 million
deaths
The cumulative number of cases is the largest in Europe (44.6
million), North America (37.4 million), Asia (30.5 million), and
South America (24.6 million)
Looking from the individual country perspective, the cumulative
number of cases is the highest in the U.S. (32.2 million), India
(18.4 million), Brazil (14.5 million) followed by France (5.6
million), Turkey (4.75 million), Russia (4.7 million), the UK
(4.4million), and Italy (4.0 million). 16 countries so far have
registered more than two million cases of COVID-19 and 26 countries
have registered more than one million cases. The first five
countries account for half of the global cases of COVID-19 since
the outbreak with the U.S. alone accounting for 21.5%
In April 2021 COVID-19 was spreading the fastest in India (6.1
million cases), Brazil (1.8 million cases), the USA (1.8 million
cases), and Turkey (1.4 million cases). The top ten countries
affected included as well France, Argentina, Iran, Germany, and
Poland; the highest death toll in April 2021, in turn, was observed
in Brazil, India, the U.S., Poland and Mexico
The two-week moving averages of global new cases and deaths are
still rising with the vicious variants spreading fast in Brazil and
India; the COVID-19 pandemic is ongoing
The reported number of vaccinations globally reached 1.09
billion with 255 million people fully vaccinated, which is
equivalent to 3.3% of the global population only; the speed of
vaccination is picking up the pace, however, inequalities abound,
only two countries or territories report by now the vaccination
rate with two doses above of 60% - Gibraltar (95.1%) and the
Falklands (62.5%)
The adjusted PMI new exports orders (PMI NExO) readouts for the
global manufacturing industry in March 2021 were above the
benchmark value of 50.0 points (53.38, a rise of +2.38 point on the
February 2021 readout) for nine out of the top ten economies. The
only country to report the PMI NExO below the benchmark value is
Russia (49.01); the highest readouts for March are reported for the
European Union (62.43), Canada (54.40) and South Korea (54.18)
The PMI for the EU-27 shows a positive trend rising the fourth
month in a row, which could be indicative of sustained recovery; in
comparison to February 2021, the highest increases are identified
for the EU (+5.06 points), Canada (+4.18) and China (+3.80)
We have three readouts for April 2021 already available for
Japan (54.33), UK (55.06) and the U.S. (56.82) that are pointing to
strong growth in trade in the forthcoming months
Both PMI NExO for global manufacturing and global services
showed a rapid COVID-19 crisis and quick V-shape recovery, however,
the readouts for services are still below the 50.0 points benchmark
(since July 2019!); the situation in services started to improve in
January 2021 (the third month of reported growth) and the situation
in global manufacturing significantly improving on February
readouts (the readouts stand at 53.38 for global manufacturing and
49.01 for global services)
The most recent real GDP growth forecasts from IHS Markit were
published on 15 April 2021 and are based on the baseline scenario
of the impact of COVID-19 on the global economy
We now estimate the contraction of global GDP by 3.6% in 2020
varying between -4.7% for advanced, -1.7% for emerging, and -5.4%
for developing economies
We foresee a global recovery in 2021 with year-on-year real GDP
growth rates predicted to reach 5.3% (4.3% in 2022) - adjusted
upwards for 2021 by 0.2% in comparison to the March release. The
growth rates are predicted to vary between 4.8% (3.9 in 2022) for
advanced, 6.2% (5.0%) for emerging, and 4.9% (4.7%) for developing
states
From a quarterly perspective, both Q3 (-1.5%) and Q4 (-0.4%)
proved to bring a continuing global recession in 2020. We predict a
global recovery to have taken place already in the Q1 of 2021
(+3.5%) driven mostly by emerging states with the stronger hike in
the present Q2 of 2021 (+10.2%). It is worth stressing, that the
IHS Markit predictions for the first two quarters of 2021 have been
adjusted upwards from the preceding release.
Recovery in China has already started in Q2 of 2020 following
the COVID-19 related contraction in the first quarter. Apart from
China (+18.8%), four other economies out of the top ten group are
now estimated to have grown in real terms in the first quarter of
2021, these are Brazil (+0.2%), Canada (+0.5%), South Korea (+0.4%)
and the U.S. (+0.1%). The UK economy is estimated to have
contracted year-on-year in Q1 2021 by 6.5%. The major recovery in
all the states is predicted continually for the present quarter of
2021 with the strongest boost predicted for India and the UK
Please note that China (mainland) reported an aggregated
value of trade for January-February 2020 and 2021 - for the year
2020 the data in the database was equally split between the two
months, while for 2021 the data were split unequally.
Please note that Brazil has revised data for 2020
affecting the reported growth rates (please be careful not to
compare the current GTM Report with prior editions due to
significant changes)
