IMF warns of slower economic growth for commodities exporters

Washington, Sep 29 (IANS) The International Monetary Fund (IMF) on Monday warned of slower economic growth for commodity exporters over the 2015-17 period against the background of falling commodities prices.

In an analytical chapter of the IMF’s flagship World Economic Outlook report, which is to be published next week in Peru, IMF economists found that the weak commodity price outlook could subtract almost 1 percentage point annually from the growth rate of commodity exporters over the 2015-17 period as compared with the 2012-14 period, reported Xinhua.

Countries exporting oil and other energy products would see a hit more than twice that size, the research found.

According to the research, analysts generally agreed that commodity prices will likely remain low, given ample supplies and weak prospects for global economic growth, and the commodity futures prices suggest future spot prices for commodities will remain low or rebound only moderately over the next five years.

The IMF economists said that exchange rate flexibility can help support the commodity exporters to offset the impact from the falling prices, while the reduced commodity-based fiscal revenues and slower potential growth will constrain their scope in deploying fiscal policy to counter the price drops.

In a separate analytical chapter, the IMF economists argued that a weaker currency could still give sizable boost to a country’ s exports despite the fact that the rise in global value chains has to certain extent weakened the relationship between exchange rates and trade in intermediate products used as inputs into other economies’ exports.

The research found that a 10 percent depreciation in a country’s real effective exchange rate could raise its real net exports of 1.5 percent of GDP.

The findings suggested the US witnessed a blow to its net exports as the US dollar has appreciated by more than 10 percent in real effective terms since mid-2014, while euro zone saw a boost to its exports following the depreciation of more than 10 percent in the euro since early 2014.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of or any employee thereof. is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here