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High commodity prices, low inflation set to continue
High commodity prices and low levels of inflation are likely to persist in the near future, according to analysts speaking at a recent forum on financial markets.
Speaking at the PIMCO Speaker Series Lunch in June, Morgan Stanley’s Gerard Minack predicted weak economic growth would continue to keep inflation levels in check, despite erosion of some factors conducive to low inflation, such as a strong currency.
Minack also identified strong growth in Chinese manufacturing as a deflationary influence.
However, Goldman Sachs JBWere analyst Malcolm Southwood said this industry growth in China and other BRIC countries would sustain the current high level of commodity prices.
Supply constraints, such as long lags in bringing new mines to market, further contributed to high pricing, he said.
AUTHOR
Mike Taylor
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