The Role of Major Emerging Markets in Global Commodity Demand

Baffes, John; Kabundi, Alain; Nagle, Peter; Ohnsorge, Franziska

doi:10.1596/1813-9450-8495

Cited by 14 publications

(11 citation statements)

References 21 publications

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“…By ordering oil price after EM7 growth, we implicitly assume that oil prices are endogenous to EM7 growth. This reflects the role of China in commodity demand (Baffes, Kabundi, Nagle, & Ohnsorge, ).…”

Section: Methodology and Databasementioning

confidence: 90%

How important are spillovers from major emerging markets?

Huidrom

Köse

Matsuoka

et al. 2019

International Finance

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The seven largest emerging market economies—China, India, Brazil, Russia, Mexico, Indonesia, and Turkey—constituted more than one‐quarter of global output and more than half of global output growth during 2010–2015. These emerging markets, which we call EM7, are also closely integrated with other countries, especially with other emerging and frontier markets (FMs). Given their size and integration, growth in EM7 could have significant cross‐border spillovers. We provide empirical estimates of these spillovers using a Bayesian vector autoregression model. We report three main results. First, spillovers from EM7 are sizeable: a 1 percentage point increase in EM7 growth is associated with an 0.9 percentage point increase in growth in other emerging and FMs and a 0.6 percentage point increase in world growth at the end of 3 years. Second, sizeable as they are, spillovers from EM7 are still smaller than those from G7 countries (group of seven of advanced economies). Specifically, growth in other emerging and FMs, and the global economy would increase by one‐half to three times more due to a similarly sized increase in G7 growth. Third, among the EM7, spillovers from China are the largest and permeate globally.

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Section: Methodology and Databasementioning

confidence: 90%

How important are spillovers from major emerging markets?

Huidrom

Köse

Matsuoka

et al. 2019

International Finance

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“…11 A 1 percentage point decline in China's growth is estimated to be associated with 0.5 percentage point lower EMDE growth after one year (Huidrom et al 2019). Since China is a major source of commodity demand, the adverse impact on commodity-exporting EMDEs is twice that on commodity importers (World Bank 2016a; Baffes et al 2018). Growth fluctuations in some of the other seven largest EMDEs could also cause adverse spillovers to EMDEs in their regions.…”

Section: Spillovers From Major Economiesmentioning

confidence: 99%

Prospects, Risks, and Vulnerabilities in Emerging and Developing Economies: Lessons from the Past Decade

Ruch¹

2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Policy Research Working Paper 9181 Growth in emerging markets and developing economies (EMDEs) has generally disappointed since the 2009 global recession, with sizable forecast downgrades in most years. EMDEs continue to face downside risks to growth outlook over the next couple of years. These include heightened global policy uncertainty, trade tensions, spillovers from weaker-than-expected growth in major economies, and disorderly financial market developments. These risks are accompanied by region-specific risks, including geopolitical tensions, armed conflict, and severe weather events. If risks materialize, their impact on EMDEs depends on the magnitude of spillovers and domestic vulnerabilities. Since the 2009 global recession, external, corporate sector and sovereign vulnerabilities have risen in most EMDEs, leaving them less well-prepared for future shocks. Low-income countries, in particular, face elevated vulnerabilities, with about 40 percent of them currently in debt distress. Over the longer run, EMDEs also face weakening potential growth, reflecting decelerations in capital accumulation and productivity growth, as well as demographic headwinds. These constraints are likely to hamper growth in the next decade unless they are mitigated by ambitious and credible reform agendas. This paper is a product of the Prospects Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world.

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“…After the 2009 global recession, commodity price slide steeply. The 2002-07 global expansion had been accompanied by surging demand for primary commodities, particularly metals, in part because of rapid demand growth in China (World Bank 2015b; Baffes et al 2018). Between 2000 and 2010, China accounted for 89 percent of the increase in global demand for industrial metals, 54 percent of the increase in global energy demand, and 17 percent of the increase in global demand for food.…”

Section: The Decade After the 2009 Global Recession: Protracted Weaknessmentioning

confidence: 99%

“…1 EMDEs continued to be the largest source of commodity demand growth (Baffes et al2018). During 2008During -2016, the EM7 accounted for almost all of the increase in global consumption of metals and energy and a sizeable share of the increase in consumption of grains (corn, rice, and wheat; Baffes et al 2018).…”

Section: Introductionmentioning

confidence: 99%