Logistics decision-makers will face new fiscal challenges

The global economic recovery has stalled, said IHS chief economist Nariman Behravesh.

By ·

Economists are revising earlier forecasts in light of recent fluctuations in supply chain metrics and production cycles.

In a recent special IHS global webcast: “What the Global Market Turmoil Means for IHS Forecasts,” shippers were told that the global economy was gripped by a “lost decade,” but that a double dip recession is unlikely.

“The global economic recovery has stalled, said IHS chief economist Nariman Behravesh. “We have downgraded our forecast for both the United States and Europe on recent data that suggests a much more fragile recovery.”

In addition, he said, other risks to the recovery remain, including rising oil prices, faltering growth in emerging markets and fiscal policy and political concerns of both the U.S. and the Eurozone.

Behravesh also warned of “policy shock,” something that was addressed in President Obama’s speech on Thursday evening.

“The single-biggest risk facing both the United States and Europe is a policy mistake—specifically, an advertent or inadvertent tightening of policy,” he said. “The uncertainty around what exactly policymakers are likely to do—faced with the twin challenges of weak growth and sovereign debt problems—is one of the biggest drags on growth.”

He added that the risk with very weak growth in Europe and the United States is not so much that the recovery will implode on its own. Rather, a fragile recovery is much less able to withstand a shock—even a weak one.

At the same time, a “bi-polar” recovery is underway, with emerging nations continuing to gain strength, said Behravesh. “The real risk in these countries is stagflation,” he said, “not recession.”

The Asia Pacific is the “star” region now, said Behravesh, with Japan proving once again to be a most resilient nation. He expects all of Asia to continue on a rapid path of expansion.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Global · Global Logistics · Trade · All Topics
Latest Whitepaper
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Details Key to Cross-border Ease
Ever-changing regulations are making it risky for U.S. companies engaged in cross-border trade...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo