AFTER falling sharply last year, trade in services grew at an accelerated pace in the fourth quarter, but continued weakness in some sectors and an spikes of COVID-19 are casting doubt on the durability of the recovery, the World Trade Organisation (WTO) said on Thursday.
The WTO's Services Trade Barometer, designed to highlight turning points and changing patterns in global trade, rose to a record high of 104.7 in March, after hitting a low of 91.2 in March, 2020 at the peak of the lockdown measures.
"After falling sharply during the global pandemic, world services trade appears to be in a recovery phase," said the Geneva-based trade body.
The strength of the rebound suggests that growth in world services trade accelerated in the fourth quarter of 2020 after bottoming out in the second quarter and picking up only slightly in the third.
"However, continued weakness in some sectors and an uneven distribution of COVID-19 vaccines cast some doubt on the durability of the recovery," it added, noting that lockdown measures in response to the second wave of COVID-19 infections have continued to weigh on growth and employment in major economies since the start of the year.
The WTO said components of its barometer related to Financial Services Index (119.9), Purchasing Managers' Index (105.3), container shipping (104.3) and construction (106.3) have all risen above their medium-term trends.
In contrast, the impact of the second wave is reflected in the persistent weakness in air transport (81.0) and a downturn in Information and Communications Technology (ICT) services (93.7).
The spread of new variants could push back international passenger flights, while the ICT index appears to have been driven by stricter lockdowns in the US weighing on some computer services, while telecom services have remained steady.
The WTO services trade barometer is a composite of published data and coincides with movements in actual trade flows rather than anticipating them. A reading of 100 marks the baseline between above and below trend growth. |
