The global economic growth in 2019 is the lowest in 10 years! The shipping industry is facing another difficult year?
- Date: Apr 12, 2019
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- Categories: News
The International Monetary Fund (IMF) cut its 2019 economic growth forecast to its lowest level since the international financial crisis, which may still be a tough year for the shipping industry.
On April 9, the International Monetary Fund (IMF) released the latest World Economic Outlook Report, which lowered global economic growth forecast from 3.3% to 3.3%, which is the lowest level since the international financial crisis. It is worth noting that the IMF has lowered its global economic forecast three times in six months.
The report focuses on:
Sino-US trade negotiations and Brexit bring downside risks to the economy.
Global economic growth has slowed since the second half of 2018 and is expected to rebound in the second half of this year.
The euro zone’s economic growth rate has been lowered from 1.6% to 1.3%.
The UK’s economic growth rate has been lowered from 1.5% to 1.2%.
The US economic growth rate fell from 2.5% to 2.3%.
China’s economic growth has been raised from 6.2% to 6.3%.
Economic growth in 2020 is expected to be 3.6%.
The IMF believes that the outlook for most of the developed economies around the world is bleak, and high tariffs are putting pressure on global trade. “With the weakening global growth momentum and limited policy response space, it is a priority to avoid policy mistakes that may harm economic activity.”
IMF President Christine Lagarde believes that the world economy is in a “subtle moment.” For the shipping industry, which is closely related to the global economic trend, the downward adjustment of economic growth is certainly not good news.
In fact, from the perspective of many important airline markets, 2019 may still be a tough year for the shipping industry.
First look at the trans-Pacific route.
The Trans-Pacific route is one of the largest ocean shipping routes in the world, and China is the most important market in the trans-Pacific route. In the context of the Sino-US trade war, the Trans-Pacific route has experienced the test of two days of “ice and fire.”
Since the carrier has optimized the route and the US importer has shipped ahead of schedule to avoid the new tax rate, the end of last year and the beginning of the year, the eastbound line of the trans-Pacific route has a rare peak season.
However, due to the current uncertainties in the Sino-US trade war, the future trend of the trans-Pacific route market is still unclear, which also makes the carrier more cautious in the delivery of capacity, and most of the market has added capacity. None of the trans-Pacific routes have been invested, so the trans-Pacific route market capacity will remain largely unchanged in 2019.
Judging from the volume of goods, this year is the first time since 2009 when the trans-Pacific route started in the peak season, there is no plan to add new routes for the first time. It is expected that the volume of the trans-Pacific route market may decline in the near future.
Look at the Asia-Europe route.
Some analysts believe that this market will continue to slump for a long time. BIMCO analysts have made it clear that in the next few years, demand in the European market will grow by less than 2%, and European container imports will be greatly affected.
Since the outbreak of the international financial crisis, the volume of the Asia-Europe route seems to be unable to escape the curse of “two years of rising, one year of falling.” However, after experiencing a continuous increase in 2016 and 2017, in 2018, the volume of the westbound line of the Asia-Europe route increased slightly by 2%, and this curse was finally broken.
In 2019, industry analysts generally maintained a forecast for the growth of the westbound volume of the Asia-Europe route, which is believed to be around 3%, but still below the global average.
The good news is that the growth of capacity in this market is expected to slow down in 2019, and the ultra-large capacity above 18,000 TEU may shift positions. Overall, the contradiction between supply and demand on the Asia-Europe route will be improved in 2019, which is conducive to the recovery of market freight rates.