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The global macroeconomic scene has become more volatile, with prominent factors such as oil prices and global currencies causing a commotion.
It has been quite some time since macro-economic development has looked this positive and as supportive of shipping.
BIMCO reported in our previous macroeconomics report in April 2017 that monthly indicators were showing a strengthening in the global economy. The firm growth dynamics in advanced economies have now, four months later, had a cascade effect on some emerging markets and developing economies (EMDE). This solid growth has sparked an appetite for EMDE assets and indicates that the market expects a pickup.
2014 is off to a good start, as global economic growth is already stronger than anticipated three months ago. At the end of January, the IMF upwardly adjusted its estimates for global economic development in 2013-2015. Amongst the countries receiving noticeable positive adjustments were the US, Japan, Spain, UK, China and India.
As the recovery continues to move forward, the bumps in the road are both new “friends” and old “foes”. We are still concerned with the lack of inflation in both the US and Eurozone, as production capacity far exceeds demand.
The recovery in the advanced economies continues to strengthen as fiscal consolidation is slowing down and investors are less worried about the debt situation. We have seen this with several southern European nations now being able to tap into the financial markets once again at interest rate levels signalling improved health.
Finally, we can conclude that a one-sided focus on monetary expansion handled by central banks is not enough anymore.
On 12 April 2016, the International Monetary Fund (IMF) released its updated World Economic Outlook stating that future economic prospects are now so poor that an immediate, proactive response is called for.
With a sigh of relief, shipping people all over the world received the positive numbers indicating the beginning of the recovery of the European economy.
2013 was expected to turn the sour circle round and bring forth a year with a higher growth rate than that of 2012 – but it is about to evaporate in the Summer heat.
