Shipping association BIMCO notes that global macroeconomic forecast organisations have downgraded global growth again
BIMCO reports that the continued slowdown in global growth, as well as a lower trade multiplier will reduce overall demand for shipping for the rest of this year and through 2020.
The shipping association’s chief shipping analyst Peter Sand notes that the World Trade Organisation has lowered its expectations of growth from 2.6% in April 2019 to a new level of 1.2% in its latest report. This is the lowest forecast since 2009.
The knock-on effect is to lower expectations of trade growth to the end of 2019 and into 2020 to 2.7% growth. This is a significant reduction from the previous forecast of 3%.
Mr Sand noted that in addition, the IMF has revised its GDP growth projections down for 2019 and 2020, so that they are now in line with BIMCO expectations following the further escalation of the trade war. Global growth is now forecast to slow to 3% in 2019 (down 0.2 points from the IMF’s July report) before rising to 3.4% in 2020 – still below 2018’s 3.6%
“The low GDP growth predictions from the IMF come despite governments around the world implementing stimulus measures. The IMF estimates that without these, global growth would be 0.5 points lower in both 2019 and 2020 (at 2.5% and 2.9%, respectively). The higher growth as a result of these packages is, of course, good news for the shipping industry, but also leaves the question of whether there is more that can be done to lift growth – especially in advanced economies – or if governments have simply run out of options for stimulating their economies,” was his conclusion.
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