Business Data
Economic analysis - commodity exporters face multi-year challenge
Commodity prices will remain s ubdued over the coming years . Indus trial metals and oil will face s us tained price pres s ure amid plentiful s upply. This is clearly bad news for commodity exporters , but prudent g overnment policy and g rowth-s upportive initiatives will help to cus hion the blow for some emerg ing markets including the UAE and Mexico. One of BMI's core g lobal views is that commodity prices are s tuck in a 'los t decade' which beg an in 20 11 and will continue over the coming years . The key factors underpinning this view are the China s lowdown, weak g lobal g rowth, a s hift in g lobal economic activity from manufacturing to s ervices , the s trong US dollar and buoyant commodity s upply g rowth. Althoug h the latter two will wane in 20 16 , we nevertheles s believe that the recovery for commodity prices will be extremely muted and protracted (see 'Commodities Will Remain Low In 2016, Agriculture Will Outperform', October 23). We expect indus trial metals and energy to remain particularly s ubdued, owing to abundant s upply. The lacklus tre outlook for commodity prices bodes ill for emerg ing markets (EM) which are heavily dependent on exports of oil and indus trial metals . Malaysia, Saudi Arabia and Russia, for ins tance, all face many years of sub-par growth.