Global economic outlook 'better than we think'

Amidst all the doom and
gloom predictions of low
growth and fears of yet
another global economic
meltdown, the world is doing
far better than most think,
says Jim O’ Neill, chairman
of the Cities Growth
Commission in the UK.
Speaking at the Mining
Indaba in Cape Town last
week, he said the world
had faced two huge global
upheavals during the last
decade and these had affected
global GDP.
“Estimates are that the
world economy will grow
around 4.1% between 2011
and 2020. This may not
sound all that impressive but
if we look at world GDP from
1981 to 1990 then we see it
was only 3.3%. It remained
around this mark until 2000
before increasing slightly to
around 3.7% between 2001
and 2010,” he said.
O’Neill added that while
the global economy was not
necessarily performing at
its best and could definitely
improve, these figures
however showed that the
situation was not as dire as
was often being made out to
be the case.
Commenting on
commodity prices, he said
mining houses were best
advised to “assume that the
following year commodity
prices will be lower than they
are in the year we are in” and
should plan accordingly.
He said in this regard it
was important to take note
of the changes in China as
the Asian giant continued
to dominate the market,
controlling supply and
demand.
“China is undergoing a
metamorphosis and it is
advisable to keep a close
watch on what they are doing
if you are in the commodities
business,” he said.
He said the country
was moving away from
its quantity approach and
fast starting to embrace
the concept of quality and
sustainability of its domestic
growth rates.