Over the past few quarters, the global economy exhibited mixed signals on its road to recovery. Some of the developed countries stabilized, whereas others struggled. Geopolitical risks such as the advancement of ISIS in Iraq and Syria and sanctions against Russia over Ukraine have cast shadows on global growth prospects and have had adverse consequences on world trade.
Among major economies, the U.S. and U.K. stabilized to a considerable extent, while China held steady and Japan remained in decline. Despite a slow start to the year, growth in the U.S. rebounded to 4.6 percent in Q2 and 3.5 percent in Q3. In Europe, the U.K. emerged as the lone performer, as demonstrated by a 0.9 percent and 0.7 percent growth rate in Q2 and Q3, respectively. Meanwhile, the economic performance gap among European Union member countries widened due to the implementation of structural reforms.
Elsewhere, the momentum of the Chinese economy remained subdued in the first half of 2014, with the government endeavoring to strike a balance between growth and reform. Japan is still facing a recession following a tax hike and deregulation of industries and labor markets. Brazil, which is expected to make a slow recovery, faces the challenge of reinvigorating consumer and business sentiment, and reelected President Rousseff will work to improve the sluggish economy and preserve social gains. Finally, in India, confidence and spending have improved markedly during 2014 as a result of progress to control inflation and the perception that the new government is growth-oriented.
Global container throughput is expected to slow, growing by 1.3 percent in the third quarter after an expansive 8.3 percent in Q2 (see Figure 1). Total trade is expected to grow by 0.4 percent in Q3, up slightly from 0.3 percent in Q2. Total trade has grown minimally for three straight quarters, which suggests that trade is holding steady amid the uneven pace of growth across the globe.