Outlook 2001

ABARE's Executive Director, Brian Fisher in his address at the annual assembly of economists and commodity producers (Outlook 2001) indicated that the world economic growth, which is of critical importance to the direction of world commodity prices, is assumed to ease in 2001 but to strengthen in 2002. Yet despite the slower world economic growth he forecast that Australia's commodity exports would rise to be worth $86 billion in 2000-2001 and $89 billion in 2001 - 2002 reflecting a relatively low Australian dollar. The value of commodity exports is then forecast to trend downwards in real terms for the remainder of the outlook period to 2005-2006. In preparing commodity projections ABARE assumed world economic growth to moderate to around 3.4% in 2001, and then strengthen to 3.9%, in 2002 supported by lower interest rates in key economies. Activity in the Australian economy is assumed to remain reasonably firm in the short term. While growth in domestic demand is likely to moderate, export performance is expected to remain strong. There has been a remarkable improvement in Australia's trade performance during the last year. This improvement is expected to continue in the short term. For energy commodities, export earnings are forecast to increase from $18.4 billion in 1999-2000 to $25.1 billion in 2000-2001 before declining to $24.4 billion in 2001-2002