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Capgemini Global Trade Flow Index Reveals Continued Growth

New results from the latest edition of Capgemini's Global Trade Flow Index show continued growth.

Every quarter, the index tracks the trade of goods and services based on an analysis of a number of trade and market-related parameters. The input data comes from the latest available official figures (related to the import and export of goods and services) from national agencies of the 23 top countries in terms of global trade in global trade flows. The latest results reveal:

Continued growth in Q4 2010, with an increase of 2.5 percent. Due to the threat of a sovereign debt crisis in the EU and inflation in developing economies, this is a slightly slower pace than the 4.67 percent trade growth recorded in Q3 2010.

A good recovery in US exports in Q4 2010, which witnessed growth of 2 percent compared to the previous quarter, thanks to a weaker dollar coupled with a rebound in the global economy.

In Q4 2010, China's export of goods and services decelerated by 2.9 percent quarter-on-quarter, leading the United States to regain its position over China in overall trade volumes.

Growth in the BRIC countries is beginning to slow as inflation becomes more of a serious threat, particularly in China and India.

In the Eurozone area, Germany continues to outperform thanks to highly favorable labor market conditions, moderate inflationary pressures and buoyant consumer confidence all despite a 2 percent drop in its trade levels in Q4 2010 compared with Q3 2010 due to a competitive devaluation in its target export markets such as the Netherlands and France. The Netherlands was also a strong performer with a rise in total trade volumes of 3 percent in Q4 2010 compared to Q3 2010. In general, easier labor market conditions, subdued inflation and an increase in consumer spending is leading to a recovery in trade levels in Europe.

"Government tightening measures in some of the world's biggest economies mean we are starting to see trade levels in Europe and the US picking up again," said Roy Lenders, Vice President Supply Chain Management at Capgemini Consulting. "At the same time, rising inflation is causing concern about growth levels in the BRIC countries. These emerging market economies will need to very carefully manage the complex trade-off between robust growth and rising inflation if they are to maintain growth here."

A full copy of the report can be downloaded from sources/by-publication/global-trade-flow -index-q4-2010/.

TAGS: Finance
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