EDITORIAL: Commodities caveats for SA
The risks to the sunny outlook are significant. and for SA, the benefits may be underwhelming
As the year opens, there is an air of optimism about the outlook for global commodity prices. "We are certainly in a sweet spot for commodity prices at present, and it’s a good time to be a resource producer," says Macquarie Research. Citing the positive outlook as one of its main themes for the year, a Citi GPS report writes of "the increasingly constructive supply versus demand fundamentals". And the World Bank, in its latest Global Economic Prospects report, predicts global economic growth will pick up this year, to 2.7%, in part because the growth rate in emerging market and developing economies will increase "amid modestly rising commodity prices". Last year saw a turnaround in commodity markets, with almost all commodity prices showing gains and investors regaining some of their appetite for the sector. It was a "China-led recovery", as Macquarie put it, after a blood bath in 2015. And the broadly positive trend is seen continuing this year as the global economy shows healthie...
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