The Role of Major Emerging Markets in Global Commodity Demand
Rapid growth among the major emerging markets over the past 20 years has boosted global demand for commodities. The seven largest emerging markets accounted for almost all the increase in global consumption of metals, and two-thirds of the increase...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/865201530037257969/The-role-of-major-emerging-markets-in-global-commodity-demand http://hdl.handle.net/10986/29948 |
| Summary: | Rapid growth among the major emerging
markets over the past 20 years has boosted global demand for
commodities. The seven largest emerging markets accounted
for almost all the increase in global consumption of metals,
and two-thirds of the increase in energy consumption over
this period. As emerging market economies mature and shift
towards less commodity-intensive activities, their demand
for commodities may plateau. This paper estimates income
elasticities of demand for a range of energy, metal and food
commodities, and finds evidence of plateauing among several
commodities. Looking ahead, as economies mature and GDP
growth slows, growth in demand for commodities may also
slow. Based on current population and GDP growth forecasts,
this paper produces scenarios of potential growth in demand
for commodities over the next decade. While global energy
consumption growth may remain broadly steady, growth in
global demand for metals and food could slow by one-third
over the next decade. This would dampen global commodity
prices. Despite an expected slowdown in its growth rate,
China would likely remain the single largest consumer of
many commodities. For the two-thirds of emerging market and
developing economies that depend on raw materials for
government and export revenues, these prospects reinforce
the need for economic diversification and the strengthening
of policy frameworks. |
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