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For example, 30% of Australia’s exports are to China and 35% of their total exports are minerals.In South Korea, a bell weather for Asia’s trade-focused economies, exports were 8.3% lower in September than a year earlier, the ninth consecutive monthly decline.There is the hope that Africa and in particular Nigeria, South Africa and Kenya, will be able to continue growing at a fast enough pace to soon take up the slack in demand created by China but these countries combined still have a lower population and GDP than China alone.
However, the fall in the price of commodities has left net importing countries such as the US which currently has a 16% current account deficit, much better off and allows companies using commodities as inputs to generate much higher margins and offer lower prices, as a result lowering inflation.
Yet, this may in fact be a bad thing as interest rates in the US and UK are already almost zero and verging on deflation, now a major problem which is currently preventing the central banks from being able to raise interest rates - something that is long overdue.
Find more statistics at Statista On reflection, while this dramatic fall in commodity prices has largely been due to China and falling demand, there have also been supply side factors.
For example, oil fell by almost $10 when news of the Iran deal and Iran’s oil production capacity was released in July.
For example, commodity giant Glencore’s share price fell 78% in the 3 months between August to October while it has now rise 65% upwards again in just the past 7 days.
Economic Slowdown In Essay
All of these insights are supported by the latest Deloitte survey of UK Chief Financial Officers just released which shows weakness in emerging economies and equity markets have hit business confidence.
This volatility can scare investors and harm firm’s confidence in future investments.
For example, Shell just called off their Artic exploration after having already spent .1 billion pursuing it as the price of oil no longer justifies such pursuits.
Find more statistics at Statista The existence of this slowdown and shift away for investments is a disaster for commodities.
China is the world’s biggest importer of crude oil consuming one of every 13 barrels globally, it also imports 45% of the world’s copper and almost half of global aluminium, nickel and steel.