Commodity Price Shocks: How They Affect Resource-Dependent Economies
Commodity Price Shocks: How They Affect Resource-Dependent Economies. Published on: wapdat25.blogspot.com The international market is a mixed blessing for many African countries. Economies grow like a rocket when the price of commodities is high. With a crash come budget failures. This is one of the most important challenges that the resource-dependent economies in the region, and indeed beyond, face – their sensitivity to commodity price volatility. Commodity Price Shocks Understanding A Commodity Price Shock is an unexpected sharp increase in the price of raw materials such as oil, gold, copper or cocoa. These shocks can have a cascading effect throughout the economy, especially for countries whose exports consist of a narrow set of primary products. Recent UNCTAD data show that commodity dependence remains a serious issue, as 95 of 143 developing economies are still highly reliant on commodity exports, such as more than 80 per cent of the world's least developed countries. ...