Commodities prices are set to rise further this year as the global economy expands faster, the International Monetary Fund has forecast, following the biggest annual price increase for raw materials in nearly four decades in 2009.
The IMF said that commodities prices were set to remain high by historical standards over the long term as the industrialisation of emerging countries supports consumption.
“Accommodating this demand will eventually require further capacity expansion in many commodity sectors, with some need to tap higher-cost sources,” it said in a report.
In the shorter term, Thomas Helbling, an IMF economist who specialises in commodities, said global activity was widely expected to expand at a faster pace in 2010, putting upward pressure on prices.
The IMF correctly anticipated last year that the low prices of early 2009 were unsustainable, defying others who said the era of high commodities prices was over. The forecast of higher prices in 2010 could worry central bankers because of the threat of higher inflation. Importing nations’ policymakers are already concerned about natural resources’ scarcity.
Monday, January 4, 2010
Commodities set to rise on back of global growth
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