Commodity prices may rise further in 2010 as the global recession abates, says Nouriel Roubini, the New York University economist who predicted the financial crisis.
“As the global economy goes toward growth as opposed to a recession you are going to see further increases in commodity prices especially next year,” Mr Roubini said today at the Diggers and Dealers mining conference in Kalgoorlie, Western Australia. “There is now potentially light at the end of the tunnel.”
The Reuters/Jefferies CRB Index of 19 commodities gained 12 per cent this year as government stimulus packages boosted demand. Oil has jumped 56 per cent in 2009 and copper surged 86 per cent.
Mr Roubini, chairman of Roubini Global Economics and a professor at NYU’s Stern School of Business, joins former Federal Reserve chairman Alan Greenspan in seeing signs of recovery. Mr Greenspan said yesterday the most severe recession in the US in at least five decades may be ending and growth may resume at a rate faster than most economists foresee.
Mr Roubini predicted on July 23 that the global economy will begin recovering near the end of 2009 before possibly dropping back into a recession by late 2010 or 2011 because of rising government debt, higher oil prices and a lack of job growth.
Economic growth in China, the world’s biggest metals consumer, accelerated in the second quarter, gaining 7.9 per cent from a year earlier.
China, the biggest contributor to global growth, overtook Japan as the world’s second-largest stock market by value on July 16 after the nation’s 4 trillion yuan ($700 billion) stimulus package spurred record lending and boosted prices of shares and commodities.
China will meet its target of 8 per cent growth in gross domestic product this year, Roubini said.
“That recovery will continue slowly, slowly over time,” Mr Roubini said today.
Bloomberg
