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Tourism is Recognized as a Vital Economic Factor 

global trade tourism

Tourism is Recognized as a Vital Economic Factor 

Following the near paralysis during the pandemic period, when travel and tourism suffered a major setback as tourist numbers fell dramatically, and deprived the receiving nations of valuable revenue.  Recognizing tourism as a vital economic factor, many Asian countries went on the offensive at the recent New York Travel & Adventure Show (NYTAS) to attract tourists to their landmarks and other attractions. 

U.S. tourists are seen as a valuable source of revenue by foreign travel and tour operators, government tourism promotion agencies, hotels, airlines, etc. all of whom seek a slice of the pie.   Asian operators are on the frontline to court U.S. tourists who are considered to be among the world’s leading spenders on foreign travel and tourism. 

Asian travel and tour operators, courting potential U.S. tourists, offered special tour packages, featuring visits to attractive tourism landmarks, etc.   Tour operators reached out to visitors by getting them to participate in fun games and quizzes about their destinations and rewarding their participation by giving them token prizes and even samples of their native food and drinks.  

Taiwan, Japan, India, Malaysia, Thailand and others made a strong pitch to highlight their tourist attractions, providing information and tips to inquisitive visitors at their pavilions. 

Taiwan’s pavilion was adorned with colorful designs and pictures, depicting its tourism features; the pavilion also had some colorfully-attired characters who produced mirth and amusement among visitors at the show. Taiwan’s tourism director in New York, Jin J.J. Juang, explained that her office, which looks after the eastern regions of the U.S. and Canada, was happy with the “good response and interest” from visitors at the show. 

“Tourist arrivals from the U.S. in Taiwan in 2024 surged some 25% over 2023 … this has been very encouraging for us after the lull in tourism experienced by many destinations during the pandemic years,” Ms Juang told the Global Trade Magazine. Tourism revenues accounts for some 4% to the island’s GDP.  “U.S. tourists are attracted to Taiwan by its natural serenity and beauty, trekking, scuba diving, etc. “she added. 

Malaysia, whose tourism industry is the second most important revenue-generating factor after exports, promoted its natural and cultural diversity mirrored in its plants and vegetation, its wildlife, its cultural and ethnicity mix, and its impressive modern architecture visible in its structures such as the Petronas towers in Kuala Lumpur, where visitors can go to the highest part of the towers to get a breathtaking glimpse of the city. 

Linawati Ismail, the director of the Los Angeles office of the Malaysian Tourism Bureau, described the U.S. market as a “dynamic and certainly a very interesting market”.  
“We are highlighting here our natural attractions such as the rainforest, the wildlife, etc. along with our multi-cultural and multi-racial national diversity.  We have colorful festivals representing various religions and cultures that make up our national fabric.  Ecotourism is another aspect that is of great interest to tourists.  In addition, we offer resorts that are attractive for diving.  While the average tourist may be unaware of our tourism attractions, Malaysia has always appealed to those who are aware of its rich tourism features,” noted Ms Ismail, adding that Malaysia had received an award for its attractive diving attributes at the Diving Equipment and Marketing Association Show (DEMA) in Florida.  Indeed, the Malaysian island of Langkawi, renowned for its sandy beaches and sea-life, figured on Conde Nast “best island award list”, she said. 

The number of U.S. tourists visiting Malaysia in 2024 touched 245,408 out of a total of 34 million from around the world. This constituted a 5.6% increase over 2019, the pre-pandemic base year. 

Ms Ismail maintained that NYTAS provided a good start to the year.  “It is a good time for the people to plan their holiday by coming here … this show helps us promote destination Malaysia in the eastern part of the U.S., just as we do so on the west coast,” she said. 

Notwithstanding the location of its booth in an obscure corner spot, India’s soft power was ubiquitously visible even from this rather disadvantageous location.  The country exudes a strong attraction to those seeking knowledge and spirituality; there is also, of course, the global appeal of yoga and Ayurveda, the technological progress and breakthroughs, particularly in software and now in the AI field, and its ancient culture and history that are reflected in the remarkable architecture of its landmarks. 

While dancers performed classical Indian dances in another corner of the hall, the modest Indian booth was packed with visitors and potential tourists drawn by the country’s tourism attractions.  The presence of a henna-designing artist attracted female visitors who lined up at the booth to have their hands painted with flowery designs. 

Many curious visitors queried the staff at the India booth about yoga and Ayurveda, cuisine, temples, travel within the country and connectivity possibilities from the United States. Some female visitors, who had never visited India, also enquired about safety for women travelling alone in the country. 

“Tourism is an important economic factor for India … India attaches great importance to U.S. tourism. Some 8% to 10% tourists arriving in India are from the U.S. There is considerable untapped potential to attract tourists with our wellness programs, meditation, adventure tourism, etc.   India also has individually-tailored programs to suit the needs of the individual tourist.  Tourism’s contribution to India’s GDP was about 9.1% in 2023.  The 2024 figures are not yet available,” explained Manish Kulhary, Consul (Trade) from the Consulate General of India in New York, in an interview with Global Trade Magazine.   

Japan had set up a huge pavilion which housed private travel and tour operators, some of whom were generously handing out samples of freshly-made miso soup, small bottles of milk shakes and other items.  An artist who painted names and other messages in attractive Japanese calligraphy was quite popular among the visiting public which waited patiently to get a copy of the calligraphy with their names inscribed in Japanese. 

Asian tourism agencies, eager to recover from the pandemic decline, will continue to court U.S. tourists who are rated among the world’s highest spenders on tourism. 

global trade

U.S. Trade Deficit Expands Significantly in December

The United States trade deficit experienced a substantial increase in December, as imports reached unprecedented levels due to ongoing tariff threats against several major trading partners. According to a report by Reuters, the trade gap surged by 24.7%, arriving at $98.4 billion, marking the highest figure since March 2022.

Read also: The 2025 Trade War Has Commenced 

The Commerce Department’s Bureau of Economic Analysis revealed that this increase was up from a revised $78.9 billion in November. This spike exceeded economists’ predictions, who had estimated the trade deficit to climb to $96.6 billion, as opposed to the originally reported $78.2 billion in November.

Contributing to this significant uptick, President Donald Trump’s recent decision to delay a 25% tariff on Mexican and Canadian goods until the following month had notable implications. Additionally, a new 10% levy on Chinese imports was enacted on Tuesday, as part of efforts by the White House to address immigration issues and curb the influx of illicit drugs such as fentanyl.

IndexBox data indicates that December’s imports rose by 3.5% to a historic peak of $364.9 billion, while exports diminished by 2.6%, totaling $266.5 billion. Despite these developments on the trade front, the government’s advance GDP estimate for the fourth quarter reported a neutral impact of trade on GDP, a stark change following three quarters where trade had negatively influenced growth. The economy grew at a 2.3% annualized rate, primarily hindered by inventory levels, compared to a 3.1% growth pace in the previous quarter.

As the trade dynamics evolve, stakeholders closely watch governmental policies and international economic relationships, which continue to shape the U.S. economic landscape.

Source: IndexBox Market Intelligence Platform 

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US Stocks Rise as Apple Earnings and Fed Inflation Index Boost Market

US stocks saw an uplift on Friday following Apple’s robust earnings report and the Federal Reserve’s inflation index aligning with market expectations. Investors remained on edge due to an impending tariff deadline set by former President Donald Trump. Read more.

Read also: Apple Outshines Tech Peers Amid AI Investment Concerns

The tech-focused Nasdaq Composite (^IXIC) advanced 0.9%, buoyed by strong performances in the tech sector. The S&P 500 (^GSPC) increased by approximately 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.3%, both continuing the upward trend from Thursday’s movements. According to data from the IndexBox platform, these gains reflect a positive investor sentiment despite the ongoing volatility in the market.

Apple shares surged at market open after announcing a first-quarter profit that exceeded estimates. Despite a downturn in iPhone and China sales, the market responded optimistically to a promising revenue forecast. Nevertheless, the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are poised for modest weekly losses, primarily due to disruptions caused by DeepSeek in the tech industry, while the Dow (^DJI) anticipates a weekly gain amidst a solid start to the earnings season.

The month of January, characterized by the volatility of Trump’s early presidency, concluded with potential monthly gains across major indexes, with the Dow eyeing an increase of over 5%. Trump’s reiterated threat to implement a 25% tariff on Canada and Mexico by February 1 has rekindled concerns over economic ramifications concerning US major trade allies.

Furthermore, Trump cautioned BRICS nations against adopting a new joint currency to replace the dollar, threatening 100% tariffs in retaliation. The dollar (DX-Y.NYB) appreciated, marking its strongest week since November. Meanwhile, the lack of definitive tariff plans has led Federal Reserve Chair Jerome Powell to adopt a cautious approach, as tariffs could potentially exacerbate inflation.

This uncertainty centers attention on the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures index. The core PCE, excluding food and energy, rose by 2.8% on an annual basis in December, meeting economic forecasts. Wall Street speculators, as indicated by the CME FedWatch tool, remain skeptical about an interest rate cut occurring before June.

Source: IndexBox Market Intelligence Platform

global trade dollar

How a Strong US Dollar is Transforming International Travel

The strengthening of the US dollar is creating notable shifts in the international travel industry, particularly benefiting American travelers with an interest in European destinations. According to Yahoo Finance, the rising value of the dollar has made Europe an attractive year-round destination for US tourists. Delta President Glen Hauenstein noted that Southern Europe, with its mild winter climate, is increasingly popular during the off-peak season.

Read also: Dollar Hits Record Levels Amid Federal Reserve Signals

This trend is reflected across major US carriers, with United and Delta reporting record earnings in their latest quarterly results, partly attributed to increased demand for trans-Atlantic travel. IndexBox data further corroborates this trend, indicating a 7% rise in demand for US-European air travel since early 2023, following the pandemic-induced surge in cross-border spending.

A Strong Dollar and Changing Travel Patterns

The US dollar’s rally against global currencies, such as the euro, has significantly impacted travel patterns, making Europe more accessible and affordable for Americans. United Airlines’ Chief Commercial Officer Andrew Nocella noted an unexpected increase in interest for winter vacations in Southern Europe, regions previously considered less desirable during colder months.

This shift coincides with a strategic emphasis on premium travel offerings by major carriers, including features like additional legroom and early boarding privileges. Additionally, United Airlines announced new routes to various European destinations like Marrakesh, Palermo, and Bilbao, targeting premium market segments. This strategic focus is aligned with a broader industry trend of capitalizing on the strong dollar while optimizing operational efficiencies, such as leveraging lower fuel costs.

As airlines anticipate continued robust demand from American tourists eager to explore European locales, the benefits of a strong dollar coupled with strategic route expansions could be a catalyst for sustained growth in international travel.

Source: IndexBox Market Intelligence Platform  

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US Firms Set to Outshine European Companies in Earnings Season

US Firms to Outperform European Counterparts in Upcoming Earnings Season

JPMorgan Chase & Co. strategists predict that profit growth at US firms will significantly outpace that of their European counterparts this earnings season. For detailed insights, you can access the original source here. The lower expectations set for S&P 500 companies play a crucial role, as analysts had significantly reduced their projections despite the US economy’s resilient growth.

Read also: The Economic Impact of a TikTok Ban in the U.S.

European Expectations Pose Challenges

In contrast, European firms are facing “more punchy” expectations, according to strategist Mislav Matejka. This scenario may present difficulties for European companies, especially when considering the varied momentum in activity across regions. This situation poses additional risks for European stocks, particularly following one of the most challenging years in the region’s stock market performance relative to the US.

Performance Metrics Indicate Divergence

The Stoxx 600 Index underperformed the S&P 500 by over 17 percentage points last year, its second-worst relative performance since 1998. Factors such as robust US economic growth and a strong appetite for US tech heavyweights contributed to this divergence. As US firms continue to report, earnings growth has reached a better-than-expected level of 7.7%, further emphasizing the potential disparity between US and European profit growth this season.

Mixed Results Globally

Despite some high-profile earnings beats and misses in both the US and Europe, the outlook for European companies remains “challenging” due to ongoing uncertainties related to China’s uneven recovery. According to JPMorgan’s Matejka, this could keep European earnings trailing behind the US throughout 2025. Citigroup Inc.’s Scott Chronert also anticipates a “larger than average” profit beat from S&P 500 firms for the fourth quarter, highlighting the contrasting fortunes on either side of the Atlantic.

Data from the IndexBox platform also supports these findings, indicating robust growth metrics for US companies compared to their European counterparts in this earnings period.

Source: IndexBox Market Intelligence Platform  

global trade tiktok

The Economic Impact of a TikTok Ban in the U.S.

The looming ban on TikTok in the United States threatens to erase billions of dollars from the U.S. economy and disrupt an essential platform for millions of American businesses and social-media entrepreneurs. According to a report from Yahoo Finance, the app’s disappearance will not significantly impact the overall U.S. economy but may compromise the thriving sub-economy built around it.

Read also: China Considers Selling TikTok’s U.S. Operations to Elon Musk

With approximately 170 million American users, TikTok’s influence stretches across diverse sectors, contributing over $24 billion to the U.S. economy in 2023, as reported by data from the IndexBox platform. While TikTok has reportedly been generating more than $20 billion annually, this figure remains difficult to verify. The app’s impact is evident in individual cases, such as Ella Livingston’s Cocoa Asante in Chattanooga, Tenn., which risks losing $25,000 in monthly sales, forcing potential layoffs of part-time workers.

Additionally, TikTok’s digital store posted a gross merchandise value of $9.7 billion last year in the U.S., highlighting its significance as a burgeoning e-commerce market. Many creators and small businesses rely heavily on TikTok for income, including 19-year-old Gift Oluwatoye from Maryland, who could lose his $5,000 monthly earnings from gaming videos.

Although the broader economic impact might remain negligible in the long run, the immediate consequences for businesses and creators dependent on TikTok are profound. The economic value also extends to consumer enjoyment, said to be worth $73 billion in 2023. As the potential ban approaches, many creators scramble to transition to other platforms, though the unique reach of TikTok’s algorithm proves hard to match.

Source: IndexBox Market Intelligence Platform  

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Developing Economies Face Sluggish Growth Amid Rising Global Challenges

Long-Term Growth Outlook Weakens for First Time This Century

Developing economies, which contribute 60% of global growth, are confronting their weakest long-term growth projections since 2000, according to the World Bank’s latest Global Economic Prospects report. While the global economy is expected to stabilize, with a growth rate of 2.7% forecast for 2025 and 2026, the progress of developing nations in closing the income gap with advanced economies remains slow.

Read also: Eradicating Poverty for Half the World Could Take Over a Century, World Bank Warns

Over the next two years, developing economies are projected to maintain growth at around 4%. However, this pace falls short of pre-pandemic levels and is insufficient to alleviate poverty or achieve broader development goals.

Key Findings

The report provides a comprehensive review of developing economies’ performance during the first 25 years of the 21st century. It highlights three significant trends:

1. Declining Growth Rates: Growth in these economies fell from 5.9% in the 2000s to 3.5% in the 2020s, driven by faltering global integration and declining foreign direct investment (FDI). FDI inflows, as a percentage of GDP, are now half their early 2000s levels.

2. Widening Income Gap: With the exception of China and India, per capita income growth in developing nations has lagged by half a percentage point compared to wealthier economies since 2014.

3. Rising Challenges: High debt levels, sluggish investment, productivity declines, and escalating climate change costs are creating unprecedented hurdles.

Indermit Gill, Chief Economist at the World Bank, stated, “The next 25 years will be tougher for developing economies than the last. The forces that once propelled their rise have faded, replaced by high debt burdens and climate challenges. These nations must adopt domestic reforms to boost private investment, trade, and efficient use of resources.”

Growing Global Importance

Despite slower growth, developing economies now play a more significant role in global dynamics. They account for 45% of global GDP, up from 25% in 2000, and over 40% of their exports now go to other developing nations, double the share two decades ago.

Moreover, these economies contribute 40% of global remittances and serve as a critical source of capital flows and development assistance. Notably, growth in major developing economies such as China, India, and Brazil has a direct positive impact on other developing countries, albeit at a smaller scale than growth in advanced economies like the United States, Japan, and the euro area.

Policy Solutions for a Stronger Future

The report emphasizes that bold policies can help developing economies overcome obstacles and seize new opportunities. Strategic trade and investment partnerships, modernized infrastructure, and standardized customs processes are critical to fostering trade efficiency.

M. Ayhan Kose, the World Bank’s Deputy Chief Economist, urged nations to pursue reforms, stating, “To navigate uncertainties, developing economies must prioritize cross-border cooperation, sound macroeconomic policies, and investments in human and physical capital.”

Outlook

While the global economy could benefit from unexpected momentum in the United States or China, headwinds such as persistent inflation, trade tensions, and policy uncertainties remain significant risks. However, the World Bank report argues that with the right strategies, developing economies can not only weather these challenges but also position themselves as leaders in addressing infrastructure gaps, driving climate solutions, and fostering inclusive development.

developing global trade economy world middle-economy

World Bank Warns of Global Economic Impact Due to Proposed U.S. Tariffs

The World Bank has issued a cautionary report about the repercussions of proposed U.S. tariffs, suggesting that global economic growth could be hindered if nations retaliate with tariffs of their own. According to Reuters, the tariffs, which stand at 10% across-the-board, might reduce global economic growth from a projected 2.7% in 2025 by an additional 0.3 percentage points. Moreover, the potential retaliation could result in a 0.9% decrease in the U.S. growth forecast of 2.3% in 2025.

Read also: Eradicating Poverty for Half the World Could Take Over a Century, World Bank Warns

The World Bank’s ‘Global Economic Prospect’ report highlights a largely stagnant global economic outlook at 2.7% growth for 2025 and 2026, mirroring the rate for 2024. In addition, IndexBox data indicates a significant rise in global trade restrictions, now fivefold what they were during the 2010-2019 period. This, coupled with a halving of foreign direct investment into developing economies since the early 2000s, paints a bleak picture for the future.

Among emerging markets, growth is expected to reach merely 4% in the coming years, stunted by burdens such as high debt, weak investment, and increasing climate-related costs. As such, World Bank chief economist Indermit Gill urges reforms that could stimulate investment and enhance trade relations to avert further declines.

The global divide continues to widen as well, with economic growth in developing nations plummeting from nearly 6% in the 2000s to an average of about 3.5% in the 2020s. The disparity is particularly pronounced when excluding economic powerhouses like China and India, with per capita growth rates for other developing nations trailing those of wealthier economies since 2014.

Given the current situation, the World Bank cautions of grave risks including persistent inflation, heightened trade tensions, and uncertainty in global policy—all potent factors that could constrain investment and stifle growth. As the global economy braces for headwinds, nations may need to prioritize resilience through strategic policy reforms and stronger trade alliances.

Source: IndexBox Market Intelligence Platform  

global trade inflation

US Inflation Shows Signs of Cooling, But Caution Remains

Underlying US inflation appears to have cooled marginally towards the end of 2024, although the Federal Reserve remains cautious in its approach to rate cuts. According to a recent report from Bloomberg, the consumer price index (CPI) excluding food and energy is projected to rise by 0.2% in December, following a consistent increase of 0.3% over the previous four months. The core CPI, which is a more accurate indicator of underlying inflation, is expected to show an annual rise of 3.3%, unchanged from the past three months.

Read also: CMA CGM Postpones Peak Season Surcharges for US-Bound Shipments

Despite these inflationary pressures seemingly stalling, the job market continues to show strength. Government data indicated that over 250,000 jobs were added in December, surpassing forecasts, while the unemployment rate experienced an unexpected decline. This robust job market, combined with resilient consumer demand, has done little to dampen long-term inflation expectations, as a University of Michigan survey highlighted that 22% of respondents plan to purchase big-ticket items now to avoid future price increases, matching a high not seen since 1990.

Economists at major US banks have adjusted their expectations for future rate cuts in light of these developments. Federal Reserve officials suggested in December that only two benchmark rate reductions would occur in 2025, reflecting a more conservative stance compared to previous outlooks. Recent comments further imply a cautious approach to monetary policy in the coming quarters.

Contributing factors to the positive economic momentum include elevated household net worth, pent-up automobile demand, and wage growth outpacing inflation, as highlighted by economists at Morgan Stanley & Co. Upcoming consumer and retail sales data, expected shortly after the CPI report, are anticipated to confirm strong spending over the holiday season. Meanwhile, manufacturing data may signal stabilization within the industry, though at subdued levels, with a forecast of a 0.2% increase in factory output for December, consistent with November’s performance.

Global Economic Outlook

On the international front, potential US tariffs remain a hot topic in Canada as provincial premiers meet to strategize, with outgoing Prime Minister Justin Trudeau spearheading the discussions. Across Europe, the UK’s inflation data is set to take the spotlight following significant market turmoil, while economic activity indicators from China and Germany will be closely monitored. In Asia, a series of trade figures and central bank decisions will paint a broad picture of economic conditions as 2024 comes to a close. South Korea and Indonesia, in particular, are expected to make rate decisions amid differing economic challenges.

Source: IndexBox Market Intelligence Platform  

global trade

Global Economic Growth Forecasted to Remain Steady Amid Challenges

The United Nations has projected that global economic growth will remain at 2.8% in 2025, maintaining the pace set in 2024. According to a report by Reuters, this trend is influenced by a deceleration in the world’s leading economies, the U.S. and China. The World Economic Situation and Prospects report outlines how modest recoveries in the EU, Japan, and Britain, as well as robust performances in India and Indonesia, are anticipated to provide supportive momentum.

Read also: Global Economy Stabilizes but Faces Slow Growth and Persistent Challenges

Despite these positive indicators, the report indicates that global growth expectations fall short of the pre-pandemic decade average of 3.2%. The slower pace is attributed to structural challenges such as weakened investment, sluggish productivity growth, high debt levels, and demographic pressures. The United States is projected to see its growth taper from 2.8% last year to 1.9% in 2025, affected by a cooling labor market and reduced consumer expenditure. Meanwhile, China is forecasted to experience a slight dip to 4.8% growth this year.

Europe is expected to see gradual improvement with growth rates rising from 0.9% in 2024 to 1.3% by 2025. This is likely to be buoyed by more stable inflation and robust labor markets. In contrast, South Asia remains a growth leader, with regional GDP predicted to climb by 5.7% in 2025. Notably, India is on course to expand by 6.6% in 2025, a performance underpinned by strong private consumption and investment.

The report suggests central banks may continue easing interest rates in 2025 as inflationary pressures ease, with global inflation expected to decrease from 4% in 2024 to 3.4% in 2025. However, it warns that monetary policies alone are insufficient to rejuvenate global growth or mitigate rising inequalities. There is a call for ambitious multilateral strategies to confront intertwined global crises, encompassing debt challenges, inequality, and climate change.

Source: IndexBox Market Intelligence Platform