Developed economies saw modest gains in Q1

Despite the eurozone's fiscal troubles, global trade in Q1/2014 increased at an estimated rate of 1.3 percent, to US $2.234 billion. That growth was largely fueled by rising exports and domestic market demand in developed economies.

Germany contributed most of the growth in the eurozone; its 0.5-percent gain in gross domestic product (GDP) was due to a rise in imports fueled by increased domestic spending. Although the eurozone emerged from recession in Q2/2013, it still faces high unemployment rates, low levels of inflation, and systemic sovereign debt.

Article Figures

[Figure 1] Container throughput vs. total trade Enlarge this image

[Figure 2] Capgemini Consulting global trade flow index Enlarge this image

In China, growth rates are expected to decelerate, as investment has slowed in response to tighter credit. Fiscal and structural reforms will undermine near-term growth as China responds to a cooling economy with policies targeted at boosting domestic consumption and private industry growth. In Japan, greater consumer spending in anticipation of domestic tax hikes lifted retail sales and industrial production, but trade growth is expected to stay flat in Q1. Meanwhile, the country continues to battle long-term deflation and low levels of consumption.

In the U.S., estimated total trade in Q1 increased 2.7 percent, a significant increase over Q4/2013 results. In response to a rebounding housing market and declining unemployment, the U.S. Federal Reserve has decided to taper its quantitative easing activities. While the downstream effects of this program may reduce liquidity and slow the pace of growth and trade in emerging markets, the outlook for U.S. trade and GDP growth remains optimistic.

Looking ahead, global container throughput is expected to grow by 1.53 percent in Q1, a big change from the 2.35-percent quarter-over-quarter decrease in Q4/2013 (Figure 1). After declining 0.8 percent at the end of 2013, throughput in Europe continues to decelerate. In our Global Trade Index, the top four countries have retained their positions for another quarter (Figure 2). For more about Capgemini Consulting's trade information services, contact Dan Albright, Vice President, Cathy Chinich, Senior Consultant, or Mark Quisao, Senior Consultant.