The value of global trade rose to a record $7.7 trillion in Q1 2022, an increase of about $1 trillion relative to Q1 2021, according to UNCTAD’s Global Trade Update published on 7 July. The growth, which represents a rise of about $250 million relative to Q4 2021, is fuelled by rising commodity prices, as trade volumes have increased to a much lower extent.
Though expected to remain positive, trade growth has continued to slow during Q2 2022.
“The war in Ukraine is starting to influence international trade, largely through increases in prices,” the report says. The war is affecting international trade by putting further upward pressure on the international prices of energy and primary commodities.
It adds that 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.
The report says 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.
In the short term, because of 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.