Description

Commodity prices have declined sharply over the past three years, and output growth has
 slowed considerably among countries that are net exporters of commodities. A critical
 question for policy makers in these economies is whether commodity windfalls influence
 potential output. Our analysis suggests that both actual and potential output move together
 with commodity terms of trade, but that actual output comoves twice as strongly as
 potential output. The weak commodity price outlook is estimated to subtract 1 to 2¼
 percentage points from actual output growth annually on average during 2015-17. The
 forecast drag on potential output is about one-third of that for actual output.

More publications in this series: Working Papers

More publications by: Aqib Aslam ; Samya Beidas-Strom ; Rudolfs Bems ; Oya Celasun ; Sinem Kiliç Çelik ; Zsoka Koczan