In 2016, India’s economy is forecast to expand by 7.5 per cent, supported by infrastructure investment and an expected expansion of the manufacturing industry.
In 2016, the global economy is forecast to expand 3.6 per cent, supported by higher growth in advanced economies, according to a report by Australian Govt’s Dept of Industry Innovation and Science .
In 2015 the global economy is estimated to have grown 3.1 per cent, a rate 0.3 per cent lower than in 2014 and well below the levels recorded over the last decade.
In its most recent World Economic Outlook the IMF noted that economic growth prospects in the short term are stronger in advanced economies, particularly the United States and United Kingdom, than in emerging economies.
As the key driver of growth in commodities use, slower economic growth in emerging economies is likely to limit consumption growth and therefore the prospect of any significant price recovery in the short term.
Prices for most commodities declined through 2015, reflecting strong growth in mining and refining capacity relative to consumption growth. The decline in prices was particularly marked in the December quarter as a result of growing concerns about demand prospects and a slow supply response.
For example, iron ore and nickel spot prices declined by 11 per cent and 19 per cent relative to the September quarter, respectively.
Outlook for major economies
China: In 2016, China’s economy is forecast to grow by 6.3 per cent, supported by increased consumption, lower interest rates and strong growth in infrastructure investment.
United States: Despite an increase in the official interest rate announced in late December 2015, growth is forecast to increase in 2016, rising to 2.8 per cent in line with continued growth in consumer spending, and stronger business and residential investment.
India: In 2016, India’s economy is forecast to expand by 7.5 per cent, supported by infrastructure investment and an expected expansion of the manufacturing industry. Economic reforms, including replacing individual regional sales taxes with a nationwide GST, are also expected to boost India’s growth prospects.