The ‘Shale Gale’ and the ‘China Chill’: the IMF’s Commodity Market Review

How will the shale revolution affect U.S. GDP and trade
balance? How would a growth slowdown in China affect commodity exporters?
Answers given in the IMF’s commodity markets review, released this morning as
part of the World Economic Outlook.
Shale Gale: There has been some euphoria about the impact of
the unconventional energy revolution on U.S. prospects. The simulations of the
IMF’s large scale models suggest a modest impact: increases in unconventional
energy production of the magnitude currently forecast will raise U.S. real GDP
by only 1.2 percent at the end of 13 years and employment by 0.5 percent. The
main reason is the small share of energy in the U.S. economy, even after
factoring in the additional production.
‘China Chill’: Which commodity exporters are vulnerable if
China’s growth slows from an average of 10 percent over the past decade to an
average of 7 ½ percent over the coming decade? The IMF’s illustrative
calculations rank the countries that have benefitted the most from past Chinese
growth—and  therefore the ones that could be vulnerable in the absence of
policy actions.
There’s a lot more in the review, including
new analysis from my colleague Samya Beidas-Strom on the drivers of the
Brent-WTI differential

Posted by at 1:00 PM

Labels: Energy


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