on trade and development
Situation as at 31 March 2021
More than one year on, the coronavirus disease of 2019 (COVID-19) pandemic continues to dominate our lives. Despite the successful development of vaccines, the end of the pandemic is not yet in sight. The number of cases continues to increase in all regions, with daily infection rates reaching new records in April. The roll-out of vaccinations has begun in many parts of the world, yet distribution and access vary greatly. This puts everyone at risk, as it allows for the virus to mutate and generate new variants. Moreover, the uneven access will likely lead to stark differences in the ability of countries to recover from this crisis and, hence, to deepening inequalities.
As countries and the international community design recovery policies to help build resilient and more inclusive and sustainable economies, up-to-date data are critical. This website aims to contribute to this endeavour. It provides a broad selection of data on the impact of the COVID-19 pandemic on trade and development, reflecting the situation as at 31 March 2021. The information serves as an updated supplement to the publication Impact of the COVID-19 Pandemic on Trade and Development: Transitioning to a New Normal, issued in November 2020. Previous indicators are complemented by new data where relevant and available, notably, data on the roll-out of vaccinations.1 Key messages are highlighted to provide an overview.
- COVID-19 cases, deaths and vaccines
COVID-19 cases and deathsGlobal COVID-19 cases, by region, 1 January 2020–31 March 2021(Thousands of reported cases)Source: UNCTAD, based on data from the World Health Organization.
Note: Data may be incomplete for the current day or week.Global COVID-19 deaths, by region, 1 January 2021–31 March 2021(Thousands of reported deaths)Source: UNCTAD, based on data from the World Health Organization.
Note: Data may be incomplete for the current day or week.
As at 31 March 2021, the World Health Organization reported that almost 128 million people had contracted the coronavirus, of which 46 million cases (or 36 per cent) had been reported since the start of 2021. On the same day, nearly 2.8 million deaths were attributed to COVID-19, of which 1 million (or 36 per cent) had occurred in 2021. Globally, the apparent mortality rate is 2.2 per cent and the data suggest that the world is currently in the grip of a third wave. The first wave peaked in mid-August 2020 (with almost 1.9 million cases in one week), the second wave, in early January 2021 (with over 5 million cases in one week) and the third and current wave began in the second half of February 2021, with no indications yet that it has peaked. In the last week of March, only seven weeks into the third wave, more than 4.1 million new cases were recorded in one week.
As at end-March 2021, the Americas accounted for 44 per cent of cumulative cases (almost 56 million) and 48 per cent of deaths (1.3 million); Europe, for 35 per cent of cases (almost 45 million) and deaths (almost 1 million); South-East Asia, for 12 per cent of cases (almost 15 million) and 8 per cent of deaths (220,000), with the lowest apparent mortality rate among the regions. Africa has recorded the highest mortality rate. The apparent rate is greatly affected by testing regimes, the number of cases recorded and the number of deaths attributed to COVID-19.
Wave patterns differ markedly across the regions. The Americas, Europe and the Eastern Mediterranean currently appear to be in the middle of a third wave. Africa has experienced two distinct waves and there are indications of increasing numbers of cases, which may signify the start of a third wave, beginning at a much higher level of daily infection rates. South-East Asia appears to be recovering from a second and relatively short-lived wave. The Western Pacific is an outlier in that it appears to be recovering from a fourth wave.
A general pattern across all regions is that the recovery from each wave is only partial, meaning that each subsequent wave starts at a higher level of daily infection rates than the previous wave. In every region, the underlying trend is of increasing rates of infection.
Vaccination roll-outVaccine doses administered per 100 people, end-January, end-February and end-March 2021
Source: UNCTAD, based on data from Our World in Data.
Note: Total number of vaccination doses administered per 100 people in total population, counted as a single dose, which may not equal total number of people vaccinated, depending on dose regime, for example, if multiple doses are administered. Latest available data are used for each end-of-month calculation.
As at 31 March 2021, 806 million people had received at least one dose of a COVID-19 vaccine.2 In absolute terms, Asia has administered the most vaccines (369 million) but this accounts for only 2.1 per cent of the regional population. In terms of population share, North America has the highest rate of vaccination (18.8 per cent), followed by Europe (12.7 per cent), and Africa has the lowest share, with 14 million people (0.6 per cent) vaccinated.Vaccine doses administered per 100 people, selected countries, January–March 2021Image
Source: UNCTAD, based on data from Our World in Data.
Note: Total number of vaccination doses administered per 100 people in total population, counted as a single dose, which may not equal total number of people vaccinated, depending on dose regime, for example, if multiple doses are administered. Latest available data are used for each end-of-month calculation.Disparities at the national level are pronounced. As at end-March 2021, Bhutan and Israel had the highest vaccination rates, at 51.6 and 60.1 per cent, respectively. Other countries with relatively high rates included the United Kingdom of Great Britain and Northern Ireland (45.9 per cent), Bahrain (30 per cent), the United States of America (29.2 per cent), Uruguay (17.9 per cent) and Morocco (11.7 per cent). The Russian Federation, a producer and exporter of a COVID-19 vaccine, has vaccinated 4.8 per cent of the population. Australia and New Zealand, which have pursued a closed border or zero-COVID strategy, had vaccination rates of 0.6 and 1.1 per cent, respectively (the latest reported data for Australia is as at 13 March).
- Economic growth
Gross domestic product growth rate, world and country groupings, 2005–2021(Annual percentage change)Source: UNCTAD calculations, based on /webflyer/out-frying-pan-fire.
The pandemic pushed the global economy into recession in 2020 on a scale not witnessed since the 1930s. To respond to this unprecedented crisis and avoid a prolonged period of depressed economic activity, Governments, particularly in advanced economies, adopted large fiscal support packages and central banks provided ample liquidity and lowered interest rates. The human and economic cost of the pandemic is still being felt, yet the support provided by Governments and the vaccination campaigns that are gathering pace have given rise to more encouraging forecasts for 2021. Global gross domestic product (GDP) growth is expected to attain almost 5 per cent in 2021, compared with predictions at the end of 2020 of GDP growth of around 4 per cent in 2021. However, in 2021, developed countries are expected to experience a relatively more significant rebound in GDP growth than developing countries, leading to concerns about a further expansion in the gap between rich and poor countries, particularly if this trend continues in 2022.
As the global economy emerges from the recession, the international community must be careful to avoid the mistakes made in the aftermath of the global financial crisis of 2008/09. It is crucial to maintain an expansionary macroeconomic policy stance for as long as it takes the private sector to regain its confidence to spend. A large public investment push will be needed, with a variety of supportive policies used to complement expansionary measures, including job guarantees and public works programmes. Measures such as increased financial flows and debt relief for developing countries should be considered, to assist them in achieving a more rapid recovery from the pandemic.
Loss of jobsWorking-hour losses: Trends in 2020 and predictions for 2021(Millions of jobs and percentage)ImageAbbreviation: Q, quarter.
Source: UNCTAD calculations, based on International Labour Organization (ILO), 2021, ILO Monitor: COVID-19 and the world of work, seventh edition, available at https://www.ilo.org/global/topics/coronavirus/impacts-and-responses/WCMS_767028/lang--en/index.htm.
Note: Number of jobs refers to full-time equivalent jobs based on a 48-hour work week.
According to ILO (2021), in 2020, 8.8 per cent of global working hours were lost relative to the fourth quarter of 2019, equivalent to 255 million full-time jobs. This translates into a loss of $3.7 trillion or 4.4 per cent of global GDP in 2019. To put this into context, during the global financial crisis of 2008/09, the loss of global working hours was only 0.6 hours. The impact of the pandemic on global working hours has therefore been approximately four times greater than that of the financial crisis. 3
The greatest loss was experienced in the second quarter of 2020, as businesses and households adapted to the first round of confinement measures. About 33 million hours, or 13 per cent of the total hours lost, were lost to outright unemployment. An additional 81 million hours were lost due to shifts to inactivity or underemployment. Consequently, the global labour force participation rate dropped by 2.2 per cent. By contrast, in 2008–2009, global labour market participation fell by only 0.2 per cent.
Irrespective of region or income group, women have been affected by employment losses to a greater extent than men. At the global level, employment losses for women were at 5 per cent in 2020, compared with 3.9 per cent for men. Furthermore, women were more likely than men to become economically inactive and drop out of the labour force. Young workers were particularly affected by the pandemic, with an employment loss of 8.7 per cent in 2020, compared with 3.7 per cent for adults.
Looking ahead, ILO expects to see a recovery in the second half of 2021 yet notes that much uncertainty remains. The speed and depth of the recovery will depend on a wide range of political, economic and health-related factors, including vaccination rates, confinement measures and whether policy measures can be maintained to promote economic and labour market recovery. Given this uncertainty, employment losses in 2021 are expected to be between an optimistic forecast of 36 million hours and a less optimistic forecast of 130 million hours.
Unemployment through a gender lensFemale and male unemployment and COVID-19 prevalence, May 2020(Year-on-year change in unemployment rate and number of cases per 10,000 people)Source: UNCTAD calculations, based on https://www.bsg.ox.ac.uk/research/research-projects/covid-19-government-response-tracker, the ILOstat database and https://population.un.org/wpp/.
Note: For countries for which monthly data are unavailable, quarterly unemployment and COVID-19 prevalence numbers are used.Female and male unemployment and COVID-19 prevalence, August 2020(Year-on-year change in unemployment rate and number of cases per 10,000 people)Source: UNCTAD calculations, based on https://www.bsg.ox.ac.uk/research/research-projects/covid-19-government-response-tracker, the ILOstat database and https://population.un.org/wpp/.
Note: For countries for which monthly data are unavailable, quarterly unemployment and COVID-19 prevalence numbers are used.
The two figures showing the situation as at May and August 2020 indicate how the progression of the pandemic had different effects on unemployment among men and women. Early measures to contain the pandemic first affected jobs held predominantly by women, such as those in personal services. As the crisis began to disrupt global and regional value chains, the impact on men’s employment increased, since more men work in sectors that are more dependent on international trade, such as the industrial supply and automotive sectors. As the spread of the virus began to slow down in some countries, certain Governments began to ease confinement measures, enabling people to return to their jobs, particularly women in the services sector.Female and male labour force participation rates and COVID-19 prevalence, August 2020(Year-on-year change in labour force participation rate and number of cases per 10,000 people)Source: UNCTAD calculations, based on https://www.bsg.ox.ac.uk/research/research-projects/covid-19-government-response-tracker, the ILOstat database and https://population.un.org/wpp/.
Note: For countries for which monthly data are unavailable, quarterly unemployment and COVID-19 prevalence numbers are used.
Even in countries in which men’s unemployment outpaced that of women, more women left the labour market entirely in 2020. This is a worrisome trend that threatens to roll back progress on women’s empowerment. Many of the women who lost their jobs may have become discouraged by situations related to the pandemic and increasingly busy with household responsibilities and therefore stopped seeking or were impeded in seeking employment opportunities. The figure reflects this concern by showing that the stronger the prevalence of COVID-19 in a country, the steeper the decline in women’s labour force participation.
- Human development and poverty
Human development indexHuman development index, 1991–2020(Annual percentage change)ImageSource: UNCTAD calculations, based on United Nations Development Programme, 2020, Human Development Report 2020: The Next Frontier – Human Development and the Anthropocene (Sales No. E.21.III.B.1, New York).
Note: For 2020, the human development index is based on simulated data.
The pandemic had negative consequences for human development in 2020. In 2020, for the first time since the United Nations Development Programme launched the Human Development Report in 1990, the human development index declined, with some of the gains achieved over the past three decades having been eroded. The pandemic-induced decline in the index is largely due to negative effects on its core components, namely, health, education and income. More than 2.7 million people have died from health problems associated with COVID-19 and the quality of education has deteriorated due to school closures and mitigation measures introduced to curb the spread of the virus. Furthermore, as a result of the pandemic, the world has experienced the largest contraction of global output since the Great Depression. These developments have resulted in a narrowing of individual capabilities and exacerbated the challenges to human development created by technological progress, climate change and inequality in resources and opportunities. In this context, there is a need for equity issues to be considered in responses to the pandemic, to reduce the potentially negative long-term impacts on human development.
PovertyExtreme poverty, 2015–2021(Millions of people)ImageSource: UNCTAD calculations, based on https://unstats.un.org/unsd/ccsa.
A notable consequence of the pandemic is the significant challenge it presents to global efforts to eradicate poverty. New estimates of the impacts on global poverty, based on January 2021 growth forecasts, indicate that 119 million–124 million people were pushed into extreme poverty in 2020.4 In the baseline scenario, global extreme poverty increased by 119 million and in the less optimistic or downside scenario, which assumes a greater contraction of growth, it increased by 124 million. Changes in poverty levels associated with the pandemic arise from two sources, namely, those who were pushed into poverty because of the pandemic (88 million in the baseline scenario and 93 million in the downside scenario) and the poor who would have transited out of poverty in the absence of the pandemic (31 million). About 60 per cent of the additional poor globally are estimated to be in South Asia. The new numbers represent a marked increase from the estimates based on the June 2020 growth forecasts, in which 88 million–115 million people were expected to be pushed into poverty. In 2021, it is estimated that 143 million–163 million people will be pushed into extreme poverty. These estimates are worrisome as it is the first time in the past two decades that there has been a significant increase in global extreme poverty, representing a major setback for efforts to eliminate extreme poverty and achieve the Sustainable Development Goals.
- Official development assistance and debt
Official development assistanceOfficial development assistance, 2020(Billions of dollars)Image
Source: UNCTAD calculations, based on https://www.oecd.org/newsroom/covid-19-spending-helped-to-lift-foreign-aid-to-an-all-time-high-in-2020-but-more-effort-needed.htm.
Contrary to expectations and despite contractions in GDP, total official development assistance (ODA) provided by the States members of the Development Assistance Committee is estimated to have risen to $161.2 billion in 2020, or its highest level to date. This marked a 3.5 per cent increase in real terms over the level in 2019. Preliminary estimates suggest that in 2020, $11.9 billion of ODA disbursements was dedicated to pandemic-related activities, of which $3.27 billion was directed to the health sector and $554 million was delivered in the form of debt relief grants to developing countries. However, total ODA figures pale in comparison to combined global stimulus packages that amounted to $16 trillion; ODA represents only 1 per cent of the total resources mobilized to respond to the pandemic. 5
ODA is the most stable source of financing for many developing countries and, while an increase was welcome, it was not sufficient to offset the significant contractions in other resource flows, namely, remittances, foreign direct investment (FDI), private capital flows and trade. In this context, the recent announcement to reallocate $650 billion in special drawing rights to help provide liquidity to developing countries is welcome.
DebtRisk of overall debt distress, countries eligible for and participating in debt service suspension initiative, as at 8 April 2021(Number of countries)ImageSource: UNCTAD calculations, based on https://www.worldbank.org/en/topic/debt/brief/covid-19-debt-service-suspension-initiative.
In an effort to assist developing countries to respond to the crisis, the Group of 20 established the debt service suspension initiative (DSSI) to provide short-term debt relief to enable the poorest countries to concentrate their limited resources on responding to economic, social and health-related needs associated with the pandemic. Since it took effect in May 2020, DSSI has delivered more than $5 billion in short-term debt relief to 47 of the 73 eligible countries. DSSI has been extended to the end of 2021 and has provided much needed breathing room, yet it is important to note that it offers only a temporary suspension of debt servicing obligations and does not constitute a decrease in the debt owed. Among eligible countries, 45 per cent are either in debt distress or at a high risk of debt distress, indicating that more significant measures will need to be taken beyond DSSI to resolve their debt difficulties. Unfortunately, the eligibility criteria have not been expanded to include additional countries that also have growing levels of debt distress.
Foreign direct investmentTrends in foreign direct investment inflows by region and country grouping, 2020(Billions of dollars)Image
Source: UNCTAD calculations, based on /fdistatistics.
Note: Estimates for 2020 are based on extrapolations of available data and are preliminary; final data for 2020 will be published in World Investment Report 2021.
The pandemic has hit international investment flows hard, although the impact has varied across regions and country groups. In 2020, global FDI fell by 42 per cent, reaching an estimated total of $859 billion. FDI in Europe and North America fell sharply, while FDI in developing Asia dropped by only 4 per cent. As a result, developing economies received 72 per cent of total FDI.Investment trends by region and type, 2020(Annual percentage change)Image
Source: UNCTAD calculations, based on /fdistatistics (cross-border mergers and acquisitions), https://www.fdimarkets.com/ (greenfield projects) and Refinitiv (international project finance).
* The trend in greenfield projects refers to the first 11 months of 2020.
** International project finance refers to the number of deals, as project values for the latest months are not available.
The pandemic has affected all types of investment, namely, greenfield projects (-35 per cent), cross-border mergers and acquisitions (-10 per cent) and international project finance (-2 per cent). The value of cross-border mergers and acquisitions reached $456 billion in 2020, a decrease of 10 per cent compared with in 2019. The number of mergers and acquisitions fell sharply in North America but increased in Europe, due to one major deal. In developing economies, the number of mergers and acquisitions in Asia increased (by 31 per cent), but fell in Africa, the Caribbean and Latin America. The value of greenfield projects reached an estimated $547 billion in 2020, a decline of 35 per cent compared with in 2019. Recorded declines were concentrated in developing economies (-46 per cent), mainly in the Caribbean and Latin America. International project finance declined by only 2 per cent due to a rally in the final months of 2020.
International investment in Goals-relevant sectorsImpact of the pandemic on investment in Goals-relevant sectors, developing and transition economies, 2020(Annual percentage change over 2019)Image
Abbreviation: WASH, water, sanitation and hygiene.
Source: UNCTAD calculations, based on https://www.fdimarkets.com/ (announced greenfield projects) and Refinitiv (announced cross-border project finance deals).
Note: For renewable energy, the growth rate remained positive but slowed down by four fifths.
In 2020, international private sector investment to developing and transition economies in sectors relevant to the Sustainable Development Goals, including FDI and other types of flows, fell by one third. Except for renewable energy, in which growth remained positive but was at less than one fifth of its pre-pandemic level, investment activity fell sharply across all Goals-relevant sectors. In contrast to overall FDI, the decline in Goals-related investment was much greater in developing and transition economies than in developed countries. The decline in the least developed countries is of particular concern.
Trade nowcastTotal global merchandise trade, 2006–2021(Year-on-year percentage change)ImageAbbreviation: Q, quarter.
Source: UNCTAD calculations, based on /system/files/official-document/gdsdsimisc2021d3_en.pdf.Trade in services, 2007–2021(Year-on-year percentage change)Image
Abbreviation: Q, quarter.
Source: UNCTAD calculations, based on /system/files/official-document/gdsdsimisc2021d3_en.pdf.
After steep declines in the first half of 2020, global merchandise and services trade bounced back in the third quarter of 2020. The data indicate a continuation of this trend in the fourth quarter of 2020 and the first quarter of 2021 but the recovery in services continues to lag behind that of merchandise trade. In the first quarter of 2021, on a year-on-year basis, merchandise trade is nowcast to have grown by 25 per cent (or 8 per cent in terms of volume), yet services trade is nowcast to have contracted by 8 per cent. The negative state of services is largely driven by the steep fall in and continued sluggish demand for tourism and travel services.
Trade policyNumber of announced pandemic-related trade measures by country grouping, 1 January 2020–15 March 2021Image
Source: UNCTAD calculations, based on /topic/trade-analysis/non-tariff-measures.
The use of trade policy instruments, both tariff and non-tariff, was a common response to the pandemic. Many of these measures had a trade restrictive effect. While most of the measures were designed to be temporary, they nevertheless disrupted supply chains and created uncertainty. Both developed and developing countries used these restrictive measures. Many countries ultimately decided to be cautious about or completely withdraw such measures, for example, the Group of 20 stated that emergency measures must be “targeted, proportionate, transparent and temporary [and] not create unnecessary barriers to trade or disruption to global supply chains”. 6 Similarly, the Heads of Government of the 54 member States of the Commonwealth pledged to lift emergency measures as soon as possible. 7 The figure shows that nearly 40 per cent of the measures that had a trade-restricting effect have since been terminated. Several countries used measures to facilitate trade in medical goods and foodstuffs, enabling easier imports. Many of these involved the elimination of tariffs by developing countries.
There is concern that such patterns will be repeated with regard to the roll-out of vaccinations and related inputs, yet most measures introduced to date with regard to vaccines are of a trade-facilitating nature and only one is a restriction on exports. Experience has shown that such restrictions could derail vaccine production and distribution efforts. Trade-related responses to the pandemic have reinforced the need for more coordinated arrangements in future in order that the market-related disruptions that often result from such measures may be minimized.Number of announced pandemic-related trade measures by type, 1 January 2020–15 March 2021Image
Abbreviations: SPS, sanitary and phytosanitary standards; TBT, technical barriers to trade.
Source: UNCTAD calculations, based on /topic/trade-analysis/non-tariff-measures.
Since January 2020, countries have used over 400 trade measures in response to the pandemic. Around 40 per cent have targeted exports and 60 per cent, imports. Export measures were almost uniform in terms of type, with 95 per cent controlling export quantity through, for example, an outright ban, thereby disrupting the dynamics of market forces. Import measures took a number of forms, with two major types, namely tariffs and price and terms of payment control, ranging from elimination and deferment to the imposition of new import tariffs, domestic taxes or other fees. Technical requirements, including sanitary and phytosanitary standards and technical barriers to trade, were also used mostly with regard to imports, to help ensure that foodstuffs and livestock were risk-free and that medical goods were safe and efficacious. Unlike with regard to exports, quantity control measures amounted to only about 8 per cent of the total measures used with regard to imports. They included the removal of quantity controls put in place before the pandemic and the imposition of new controls.
Number of international tourist arrivals, 2019 and 2020ImageSource: UNCTAD, based on https://www.e-unwto.org/toc/wtobarometereng/19/2.
The pandemic brought international travel to an abrupt halt. International tourist arrivals fell by 74 per cent, from almost 1.5 billion in 2019 to around 381 million in 2020. In this period, Asia and the Pacific experienced the steepest decline in international arrivals, at 84 per cent and, as a result, it dropped in ranking as the region with the second most international arrivals to the region with the third most international arrivals. Africa and the Middle East experienced declines of 74 and 75 per cent, respectively. The Americas and Europe experienced the lowest, but nevertheless disruptive, declines, of 68 and 70 per cent, respectively. Combined, this represented a loss of an estimated $1.3 trillion in international tourism expenditures, an amount about 11 times greater than the loss experienced during the global financial crisis of 2008/09. Given that the tourism sector is a major source of employment, government revenue and foreign exchange earnings in many countries, particularly in developing countries, the drastic decline in tourism revenues has had major ripple effects.
Shipping: Port calls and container freightWorld commercial fleet: Weekly port calls, four-week moving averageImageSource: UNCTAD calculations, based on data from MarineTraffic for ships of 5,000 gross tonnage and above.
Port calls fell significantly at the start of the pandemic. The greatest decline in port calls was, among others, among ships that move passengers, including ferries, cruise ships and roll-on, roll-off ships. Container ship port calls have recovered and are in many regions back to their pre-pandemic numbers, if not higher. Demand for containerized trade is up on several routes, partly in response to increased purchases by households of consumer goods during confinement measures, with many such goods made in Asia, particularly in China. As the trade imbalance between China and the United States has increased in recent years, up to 80 per cent of the containers moving westwards from the west coast of the United States have been empty.Shanghai containerized freight index, weekly spot rates, 18 December 2009–9 April 2021ImageAbbreviations: FEU, 40-foot equivalent unit; TEU, 20-foot equivalent unit.
Source: UNCTAD calculations, based on data from Clarksons Research.
The greater-than-expected demand, combined with capacity management by carriers at the beginning of the pandemic and a shortage of equipment (ships, trucks and, most importantly, empty containers), has led to a surge in freight rates. A large part of the surge in demand comes from Europe and North America, resulting partly from stimulus packages, yet freight rates have increased globally. The interconnectedness of shipping markets recently became further evident following the obstruction of the Suez Canal by a grounded container ship. One result of this incident was a further shortage of available containers, as empty containers returned to China behind schedule. The rates that increased the most were not those for trade through the Suez Canal but for trade on long-distance routes served by fewer companies, such as from Shanghai, China, to Lagos, Nigeria, and Santos, Brazil. Finally, higher prices for container leasing led to another spike in rates.
Commercial flightsNumber of commercial flights per day, 1 January 2019–31 March 2021ImageSource: UNCTAD calculations, based on www.flightradar24.com/data/statistics.
In 2020, commercial air traffic fell by 42 per cent, from 42 million flights in 2019 to 24.4 million flights in 2020. In the first quarter of 2021, compared with in the first quarter of 2019 and the first quarter of 2020, air traffic was down by 36.7 and 30.4 per cent, respectively. The International Civil Aviation Organization states that in 2020, global passenger traffic fell by 60 per cent, or 2.7 billion passengers, compared with 4.5 billion passengers in 2019, bringing global air travel back to the level in 2003; and indicates that the near-term outlook is for prolonged depressed demand, with downside risks to global air travel recovery predominating in the first quarter of 2021. 8 The International Civil Aviation Organization projects that in 2021, global passenger numbers will be 44–56 per cent lower than in 2019, which would translate into additional losses of $281 billion–$351 billion in the gross passenger operation revenues of airlines. 9
World manufacturing output(Year-on-year percentage change)ImageAbbreviation: Q, quarter.
Source: UNCTAD, based on https://www.unido.org/resources-statistics/quarterly-report-manufacturing, 2020 quarter 4.
After a significant decline in the first half of 2020, global manufacturing output showed signs of recovery in the second half of the year. Following a significant drop of 11.2 per cent in the second quarter due to pandemic-related confinement measures, output grew by 2.4 per cent year-on-year in the fourth quarter of 2020.Industry growth rates, fourth quarter 2020(Year-on-year percentage change)ImageSource: UNCTAD, based on https://www.unido.org/resources-statistics/quarterly-report-manufacturing, 2020 quarter 4.
The early recovery has been uneven, in terms of both industries and country groupings. For example, some industries have reported moderate growth across all country groupings, such as computer, electronic and optical products; rubber and plastics products; and chemicals and chemical products. In contrast, fabricated metal products, basic pharmaceutical products and other industries have experienced declines in industrialized countries. Year-on-year in the fourth quarter of 2020, there were considerable reductions in nearly all country groupings in textiles, wearing apparel and coke and refined petroleum products. Overall, the recovery to date has been more pronounced in developing economies, led by China, than in developed economies.
- Commodity prices and selected stock prices
Commodity pricesCommodity price index, January 2000–February 2021(Base year = 2015)Image
Source: UNCTADstat database.
Commodity prices declined at the start of the pandemic in early 2020, with the index of all commodity groups dropping from 115.51 in December 2019 to 73.47 in April 2020. This 36 per cent decline in only four months was the result of responses to the pandemic, particularly confinement measures. Apart from minerals, ores and metals, all commodity categories experienced a drastic drop in prices. Fuels recorded the most dramatic decline, falling from 115.65 in December 2019 to 49.08 in April 2020, a drop of 58 per cent. Thereafter, as it became clear that the pandemic would extend into the longer term, countries began to adapt response measures. The reopening of economies, particularly in China, the world’s greatest importer of primary commodities, resulted in increasing demand and, therefore, higher prices. By December 2020, most commodity prices had recovered from their lows in April 2020. The price rally continued into 2021, with the index of all commodity groups reaching 131.85 in February 2021, or 14 per cent higher than the pre-pandemic level. In February 2021, the food price index was 114.85, or 10 per cent higher than in December 2019 and 17 per cent higher than the low in April 2020. In December 2019–February 2021, the index of minerals, ores and metals increased steadily, gaining 35 per cent of its pre-pandemic value. Similarly, the index of fuels recovered from its low in April 2020, reaching a value of 122.16 in February 2021.
The price declines in December 2019–April 2020 may be primarily explained by the pandemic yet the factors behind what occurred subsequently are more complex. The pandemic has continued and most related measures remain in place in many countries, yet commodity prices continue to increase. Two main factors may explain the current state of commodity markets. First, the early recovery of the economy in China, given its position as the greatest importer of commodities. The new focus in China on high-end manufacturing to build domestic capacity in technology and innovation may, for example, help explain the rally of prices for minerals, ores and metals. Second, the current economic environment, with a weak United States dollar, near-zero interest rates and increasing demand for commodities associated with the green transition (cobalt, lithium, aluminium, nickel, manganese and graphite, among others). Some analysts suggest that the world may be on the cusp of a new commodity supercycle. 10 The period under consideration is too short to confirm this, however, given that previously observed comparable price movements did not necessarily lead to a supercycle.
Stock prices of technology companiesStock prices of leading technology companies, 1 Jan. 2020–31 Mar. 2021(Percentage; 1 January 2020 = 100)Source: UNCTAD calculations, based on https://finance.yahoo.com/trending-tickers.Stock prices of leading technology companies, 1 Oct. 2020–31 Mar. 2021(Percentage; 1 October 2020 = 100)Source: UNCTAD calculations, based on https://finance.yahoo.com/trending-tickers.
The pandemic has accelerated the expansion of electronic commerce and other online and digital services. This has been reflected in the sharply rising stock prices of leading technology companies, which have outperformed broad market indices.
However, in October 2020–end-March 2021, another pattern occurred. The growth of the stock prices of most of these companies had mostly stayed below the value of Standard and Poor’s 500 index, showing relatively moderate growth or a decline. During this period, the index increased by about 17 per cent, while the stock prices of Apple, Facebook, Microsoft and Tencent increased by 4–16 per cent and those of Alibaba and Amazon declined by 21 and 4 per cent, respectively. Of selected companies, only Google outperformed the index, with an increase of almost 40 per cent. This suggests that the general benefits from increased online activity may have been priced in and that company-specific circumstances are once more becoming important in the price development of individual stocks. This is illustrated by the fluctuations in the stock prices of Alibaba and Tencent, which have been affected by recent initiatives by the Government of China to amend the competition law and introduce new regulation to curb the monopoly of large technology companies.
- Small and medium-sized enterprises
Impact of the pandemic on firms by size(Percentage)ImageSource: UNCTAD calculations, based on www.enterprisesurveys.org.
Note: Data were obtained from probit regressions on a sample of 35,490 formal enterprises in 40 countries surveyed by the World Bank, updated in March 2021.The pandemic has affected the business community and significantly reduced market demand for the products and services of microenterprises and small and medium-sized enterprises (SMEs). A significant proportion of such enterprises have experienced heavy losses in revenue and many are out of operation due to confinement measures and other measures taken by authorities. Apart from sectoral characteristics, several factors help explain the vulnerability of microenterprises and SMEs. Small businesses have fewer resources and less capacity to cope with abrupt economic shocks. They normally do not have diversified businesses, markets, suppliers or external support that may be leveraged during a crisis. The results of an enterprise survey in 40 countries show that a greater share of SMEs, compared with large enterprises, experienced year-on-year decreases in demand for products or services, the supply of inputs and liquidity or cash flow availability after the start of the pandemic.Pandemic-related policy measures supporting small and medium-sized enterprises, as at March 2021(Percentage)ImageSource: UNCTAD calculations, based on https://www.worldbank.org/en/data/interactive/2020/04/14/map-of-sme-support-measures-in-response-to-covid-19.
Supporting microenterprises and SMEs is an important part of the pandemic-related relief packages of Governments. A mapping of support measures implemented worldwide shows that debt finance (loans and guarantees), employment support and tax relief are the policy measures that are used the most. It is important to continue and further strengthen support measures for microenterprises and SMEs, to help alleviate the impacts of the pandemic.
- Greenhouse gas emissions
Greenhouse gas emissions and reduction paths, 1990–2020(Gigatons)ImageAbbreviations: CH4, methane; CO2, carbon dioxide; F-gases, fluorinated gases; N20, nitrous oxide.
Source: UNCTAD calculations, based on https://www.carbonbrief.org/global-carbon-project-coronavirus-causes-record-fall-in-fossil-fuel-emissions-in-2020 (carbon dioxide emissions for 2020), https://www.pbl.nl/en/publications/trends-in-global-co2-and-total-greenhouse-gas-emissions-2020-report and https://www.unep.org/interactive/emissions-gap-report/2020/.
Note: Emissions from land use changes are not included.
Confinement measures and the scaling down of economic activity associated with the pandemic have resulted in a significant reduction in fossil fuel consumption globally. In 2020, this reduction led to a decline in global energy-related carbon dioxide emissions by two gigatons, or 5.8 per cent, compared with levels in 2019.11 This is the greatest annual reduction recorded since the Second World War, bringing global emissions back to the level of nearly a decade ago. The last significant decline, caused by the global financial crisis of 2008/09, yielded a reduction of only 0.4 gigatons. However, even if the reduction of carbon dioxide emissions associated with the pandemic in 2020 could be sustained, it would not be enough to achieve the reduction targets in the Paris Agreement under the United Nations Framework Convention on Climate Change. Global emissions need to be reduced by almost 8 per cent every year in the next decade to reach the goal in the Paris Agreement of pursuing efforts to limit the global average temperature increase to 1.5°C above pre-industrial levels. 12