Commodity Exporters Looking to Gain

Conventional wisdom suggests commodity exporters will take price declines on the chin, but Morgan Stanley expects they’ll benefit most.

It’s all about curing the Dutch Disease, Morgan Stanley said in a note last week, referring to the negative economic impact of increasing natural resources investment at the expense of other sectors.  “If left uncured, the net effect is usually a decline in productivity that tends to hurt growth over longer periods,” the bank said.

“Commodity exporters face a difficult transition, some a recession, and even after that, a few could lapse back into mediocre growth and low productivity,” it said.  But it added, “commodity price falls of this magnitude can completely change the structure of commodity-exporting economies, while no such dramatic transformation occurs among commodity importers.”


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