Record first quarter of $7.7 trillion for world trade

World trade closed a record first quarter in 2022, up nearly 15% to $7.7 trillion. This is an increase of around one trillion dollars compared to the same period last year, according to the United Nations Conference on Trade and Development (UNCTAD).
 
Despite this significant growth, the UNCTAD report warns of the risks of new restrictive policies being implemented globally and geopolitical clashes, which could reverse this trend and greatly damage trade and the international economy.
 
"The war in Ukraine is beginning to influence international trade, largely through price increases," says the study. 

The effects of a situation that in this first quarter have been minimised thanks to the strong growth in trade in goods and services. A trend that is expected to "remain positive but continue to decelerate in the second quarter", according to UNCTAD.
 
At almost $6.1 trillion, trade in goods increased by 25%, while trade in services soared, growing by about 22% to $1.6 trillion. 
 
In this first quarter, both developing and developed countries increased their trade in goods very markedly, something that export growth shows in both cases. In developing countries this increase was approximately 25%, while developed countries grew by 14% more than in the same three months of the previous year. 
 
In fact, trade between developing countries was almost 23% higher this first quarter than the same period in 2021; more importantly, about 42% higher than pre-pandemic levels.
 
But one of the main concerns of experts is that the current troubles in terms of political conflicts and restrictive government measures have meant that growth forecasts for the remainder of 2022 are being revised downwards.

According to UNCTAD, international trade is very likely to reflect negatively on inflationary trends and the fallout from the Russian invasion of Ukraine later this year. "The conflict in Ukraine is putting further upward pressure on international energy and commodity prices," they say.
 
Another major problem is the divergence between the increase in the value of world trade (around 30%) and the growth in trade volumes, which by comparison evolved much less (around 6%). This is mainly due to higher commodity prices, especially for energy products, and general inflation, according to UNCTAD.
 
"In the short term, due to inelastic global demand for food and energy products, higher food and energy prices are likely to result in higher trade values and marginally lower trade volumes," the report says.

This is reflected in the International Monetary Fund, which last month cut its estimate of global growth for 2022 from an initial 4.4% to 2.9 % for the second time, having already done so in April.
 
"The continued tightening of financial conditions is expected to increase pressure on the most indebted governments, amplify vulnerabilities, and negatively affect investment and international trade flows," the report said.
 
This condition could be reversed through the implementation of renewable energy in day-to-day industry and global trade. This will depend to a large extent on governments implementing sustainable policies that regulate and stimulate international trade.