EIU tips 5.2% global trade growth in 2014, lifts US, China forecasts

LONDON – in its latest Global Forecast, the Economist Intelligence Unit has lowered its estimate for trade growth in 2013 to 2.9% from 3.3%, but says it expects trade flows to pick up in 2014, with growth of around 5.2%.

“Economic conditions are improving in a number of important trading countries, including the US and China, but the gains are coming too late to help this year's trade numbers,” the EIU says.

Of the US, it says economic growth accelerated in the third quarter and the jobs market is gaining momentum, suggesting that recent fiscal battles have not seriously harmed the economy. “Although the partial shutdown of the Government in October will restrain fourth-quarter growth, the economic recovery remains on track and the outlook is improving.” The EIU has slightly raised its 2013 GDP growth estimated for the US to 1.7% from 1.6%.

On China, the EIU says the economy grew by a faster than expected 7.8% in the third quarter on the back of a modest Government stimulus programme. “We have, as result, raised our estimate for 2013 GDP growth to 7.7% from 7.5%. We continue to expect the rate of expansion to slow in 2014 as the Government seeks to restrict excessive lending, and we maintain our forecast of 7.3%.”

It says growth in the Euro zone slowed in the third quarter, denting some of the optimism after a reasonably strong showing between April and June. “The results in France, where the economy once again contracted, were particularly disappointing. Although we expect the Euro zone recovery to continue, the process will be subject to periodic setbacks. We nonetheless confirm our outlook for growth of around 0.9% in 2014.” www.eiu.com (ATI).