Global Commodity Price Falls: A Transitory Boost to Economic Growth in Asia-Pacific Countries with Special Needs ((ESCAP Trade Insights: Issue No.8)

Working paper27 Mar 2015

The recent collapse in international commodity prices (June 2014 to February 2015) has both positive and negative implications for Asia-Pacific economies, depending upon net commodity-trade positions. Here the focus is on the impacts to net commodity-importing economies. In the short-run, these economies are likely to benefit from a downturn in commodity-prices. Major consequences include: higher disposable incomes, greater domestic demand, and faster economic growth. However, because commodity prices are highly volatile in the long-run, benefits from lower prices may in fact be transitory.