World economy showing slow signs of growth
While growth in the world economy remains slow, Afriforesight research head Vinesh Chetty has said growth for the full year will likely be positive, noting that research by Afriforesight indicates that there will not be a global recession.
In a webinar hosted by Afriforesight, on July 10, titled ‘Cobalt and Copper: African Opportunities’, Chetty explained that the slow growth could be attributed to the wave of inflation, adding that high interest rates often placed more downward pressure on the world economy.
He said that, while economic growth this year was weak, it was growing, mainly driven by the US and China.
He added that deglobalisation was also contributing to slower growth rates. Citing the example of the US trying to establish tariffs against Chinese goods, Chetty said trade barriers created friction and inefficiencies in the world economy, thereby contributing to slower growth.
He noted, however, that growth was picking up on account of interest rates declining, with the European Central Bank having recently cut interest rates. The US Federal Reserve was expected to follow suit.
On the other hand, Chetty argued, trade barriers could also create opportunities for countries not impacted by tariffs.
For example, while US consumers pay more for goods imported from China, there were opportunities for countries such as India, Vietnam and Mexico to increase their exports to the US.
“While the global delinking slows things down, it does create opportunities for . . . countries to ramp up their production.”
Meanwhile, Chetty pointed out that growth in the world economy had also been spurred by greater investment in green technologies, thereby leading to an increase in demand for metals such as copper and cobalt.
He explained that, as copper was tied to various sectors in the world economy, when the world economy performed well, so did copper.
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