Who is Driving Global Economic Growth?

Trade growth has slowed since 2012, relative to both its strong historical performance and to overall economic growth. According to data provided by the IMF, the overall weakness in economic activity – in particular in investment – has been the primary restraint on trade growth. Also contributing to the slowdown has been the waning pace of trade liberalization and the recent uptick in protectionism. Average annual global output growth through 2021 is estimated to be 3.0 percent.

The global economy remains sluggish moving into 2017, but the growth outlook is nevertheless somewhat stronger than in recent years. After slow momentum in 2016, global growth is projected to recover to 3.4 percent in 2017. This forecast reflects a more subdued outlook following the June 2016 U.K. vote in favor of leaving the European Union (better known as Brexit), as well as weaker-than-expected growth in the United States. Financial market sentiment toward emerging market economies will continue to improve in 2017, with emerging Asia in general and China and India in particular seeing the highest levels of dynamism over the next five years.

emerging markets performance

After years of increasing global economic integration, politicians are facing significant political pressure to limit imports. In June 2016, the WTO reported that the application of new trade restrictions by G20 economies reached its highest level since the organization began monitoring them in 2009. This increased protectionism is one reason why global trade remains below its pre-crisis peak, and continues to suffer from slow growth. The WTO estimated that trade expanded by a mere 1.7 percent in 2016, the slowest pace since the global financial crisis

Geopolitical tensions have been rising, leading to territorial disputes and international sanctions. At the same time, domestic politics is becoming more unpredictable in many countries around the world. Because of this, progress on multilateral free trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP) are increasingly unlikely to be ratified in the short to medium term.

Addressing the general weakness in economic activity, especially in investment, will stimulate international trade. This could in turn help strengthen productivity and growth. In addition, further reforms that lower trade barriers would boost the international exchange of goods and services, and in doing so it will revive trade and encourage growth.

Shipping Container Investments Can Protect Against Inflation

When planning and managing your investments, inflation is an influential economic factor that you must take into consideration, and carefully plan for.

Inflation is the rate at which prices for goods and services is rising. For example, if you invest in a stock that provides a 5% return, but inflation is 6%, you are actually losing buying power.

Over time the price of buying things, from a loaf of bread to a new home, often rise. When these increases become excessive, your purchasing power will decline rapidly. This presents challenges for consumers and investors.

When it comes to protecting your investment portfolio from the adverse affects of inflation, there are a few strategies you can adopt to avoid unnecessary hardship; one of which is investing in containers.

In addition to generating income, shipping containers provide diversification too. The container shipping industry gives investors access to countries that may not be experiencing inflation. Diversifying in assets that work abroad, such as shipping containers in emerging markets, provide protection for your portfolio by operating outside the perils of the domestic economy.

Like other commodities, such as real estate investments, the value of container investments tend to rise when inflation is rising, and therefore provide protection against the decreased value of a currency.

rising inflation investing quote

“Inflation is going to be something that may gradually affect your portfolio. Whether that effect is positive or negative depends on the actions you begin to take. You want to be diligent about your investments knowing that change is afoot.” – Craig J. Ferrantino, President of Craig James Financial Services.

Economists agree that inflation is an economic phenomenon that you can expect, with near certainty, will occur at some point in time in your investing career. So, it’s important for you to understand how to invest and plan in such a way that your assets maintain their purchasing power. Consider this … placing money in a saving account will cause a major loss in purchasing power by retirement. Hypothetically, earning 4% in a savings account while inflation grows at 7% makes you feel 4% richer, when in fact you are 3% poorer.