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March 30, 2017
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Global Trade and Container Flow Index: Growth projections for Q4 are conservative

Comment
Both emerging and developing economies have shown inconsistent growth, which supports a more modest global economic outlook.

Overall global economic growth is in recovery mode, fueled by slow but steady growth of advanced economies and the gradual stabilization of emerging-market economies. Growth projections are conservative due to the uncertainty sparked by events such as "Brexit" and the U.S. election, along with continued relatively low oil prices.

Mature economies demonstrated resilience in Q3 as the U.S. gross domestic product (GDP) improved 0.9 percent, due in part to consumer product consumption and industrial sector growth. The eurozone contributed to this mild uptick with modest GDP growth despite the Brexit vote. This is believed to be largely attributable to supportive monetary policies and an improving labor market. However, a decline in investments is leading experts to remain conservative in their forecasts of world GDP and total trade growth for Q4.

Article Figures
[Figure 1] Container throughput vs. total trade
[Figure 1] Container throughput vs. total trade Enlarge this image
[Figure 2] Capgemini Consulting Global Trade Flow Index
[Figure 2] Capgemini Consulting Global Trade Flow Index Enlarge this image

Both emerging and developing economies have shown inconsistent growth, which supports a more modest global economic outlook. The BRIC countries all demonstrated positive GDP improvements in Q3, but their growth forecast looks bleak. Although Chinese retail sales accelerated 10.3 percent in Q3, the country is still demonstrating weak export and investment numbers. With its export market rebounding from a dismal Q2, Brazil has some cause for a slightly more confident outlook, but it will continue to struggle with stagnant oil and commodity prices. And despite its recent aggressive GDP growth, India saw a significant slowdown in Q3. As a result, it's not yet possible to predict future growth.

Global container throughput is expected to have grown by 0.80 percent in Q3, a significant decrease over the 3.65 percent seen in Q2 (see Figure 1). Total trade is expected to be down by 1.02 percent in Q3 after increasing by 1.71 percent in Q2. Following recent trends, both container throughput and total trade are expected to continue to fall in Q4 as global investments drop and the Chinese economy continues to slow.

Cathy Chinich is a managing consultant at Capgemini Consulting. Chris Griego is a consultant at Capgemini Consulting. Adrian Penka is a consultant at Capgemini Consulting.

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