Emerging Markets outlook 2018

Kuwait-based 3PL Agility has published its “2018 Emerging Markets Logistics Index”. The summary is seen as mostly positive in the report. It says “Despite the political uncertainty which has affected many countries and regions around the world, global economic development has been largely unaffected. ”

There is good news for most of the countries and the fear of slowdown seems to have waded off, at least for the moment. With  emerging market countries such as China and India are embracing ‘Industry 4.0’, and investing heavily in innovations which are starting to revolutionize global businesses, the overall outlok is quite bullish.

There are some dark spots too, like China’s debt mountain, political upheaveal in Saudi Arabia, and Corrupotion scandals in Brazil, political uncertainity in Europe and Political situation in North America to mention a few.

The Agility Emerging Markets Logistics Index uses three metrics to assess and rank 50 emerging markets. The metrics measure the countries’:
• Market Size & Growth Attractiveness (50% of overall Index score)
• Market Compatibility (25% of score)
• Market Connectedness (25% of score).

Logistics executives are optimistic and share the IMF’s view that 2018 will be a stronger year for emerging markets.

Small and medium-size businesses – those with fewer than 250 employees – are expected to be the biggest beneficiaries of emerging markets growth, industry executives believe.

India’s Goods & Services Tax unification and other economic reforms have been greeted favorably by the logistics industry. The percentage of professionals who said their companies are now considering investment in India jumped from 22.8% a year
ago to 37.4% in the latest survey.

Improve infrastructure in sub-saharan africa has helped buoy the mood here as well.

The busiest emerging markets air freight lanes originating in the EU or US tend to connect to larger emerging markets in the Index: China, UAE, India, Mexico, Turkey, Saudi Arabia, Brazil, Russia and South Africa. Volume growth for five of these lanes in 2017 is forecast to be in the double-digits, while three more are in the high single digits. EU-South Africa is predicted growth of 3.8%, while EU-Saudi Arabia is the only lane where a volume contraction should be expected.
The five fastest-growing trade lanes in 2017 are EU-Ukraine (+40.9%), EU-Qatar (+39.4%), EU-Angola (+38.3%), US Ecuador (+33.3%) and US-Russia (+30.8%).

EU air shipments to emerging markets are on pace to increase by 10.2% for 2017, while US air shipments to those same markets look set to grow by 9.1%.

Entering 2018, the global economy is clearly in an upswing; some may even call it a boom.

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