The World Bank reported on Tuesday that it was slightly upgrading its 2024 growth projection for the global economy as a whole, thanks to the strength of US demand after last year’s historic recession.
Commodity Trading in South Africa: The Global Growth Outlook
However, the Washington-based arm of the international financial institution stressed that the increase was not a full recovery, with overall output staying well below 2019 levels through 2026.
In a revised edition of its Global Economic Prospects report, the World Bank predicts that the global economy will escape a second annual contraction in real GDP growth since the giant surge launched in 2021, after the COVID lockdowns of 2020.
The bank’s 2024 growth forecast of 2.6% represents no change from its projection for 2023, but it is 0.2 percentage points higher than the update it released in January, boosted by surging US demand.
Commodity Trading in South Africa: U.S. Economic Impact
The World Bank’s Deputy Chief Economist, Ayhan Kose pointed out that while inflation has been tamed by sharply higher interest rates in the US and elsewhere with little apparent effect on job losses or general economic disruption, a prolonged period of slow growth is the real risk.
‘In a way, we see this soft landing as a possibility,’ he told Reuters. ‘But again, the risk of a longer period of slow, more protracted growth is still there.’
The World Bank expects growth of 2.7% in 2025 and 2026, down from the 3.1% average over the preceding 10-year period prior to the pandemic.
Interest rates are forecast to remain double the 2000-2019 average, which will weigh on growth and increase debt servicing costs in emerging markets that borrowed in dollars.
Commodity Trading in South Africa: Challenges for Emerging Markets
Nations comprising 80% of the world’s population and gross domestic product will grow less than pre-pandemic levels through 2026.
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The World Bank’s report notes that ‘the outlook for the lowest-income countries is especially gloomy’ where debt servicing is high, trading opportunities are low, and climate events are expensive.
The World Bank’s chief economist, Indermit Gill, stressed that these countries would require international assistance to meet their financing needs.
Commodity Trading in South Africa: U.S. and China Forecasts
Another scenario offers the possibility of persistent inflation in advanced economies pushing up nominal interest rates by about 40 basis points north of baseline, and ultimately slowing global growth to 2.4% in 2025.
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Just as in 2023, strong US demand and elevated inflation prints have pushed back US Federal Reserve rate-cut expectations to 2024 and lifted growth forecasts for the US economy for the second consecutive year.
The World Bank now projects US growth of 2.5% in 2024 (versus 1.6% in January), driven by surging exports, rebounding US business investment, and strong household demand.
Chinese growth, driven by increasing exports in the face of weak domestic demand, was raised to 4.8% (from 4.5%) for 2024 but, reflecting weakening investment and dented confidence in the property sector, is expected to slow to 4.1% in 2025.
In India, which is projected to become the fastest-growing major economy in the world in 2024, higher household spending drove a gender-growth forecast upgrade for that year to 6.6% (up from 6.4%).
Commodity Trading in South Africa: Risks and Opportunities
The World Bank highlights a few predominant downside risks for the global outlook, such as further spillover effects from the conflict in Gaza and Ukraine that disrupt oil and grain markets further.
A rise in trade restrictions due to mounting rivalries among geopolitical powers remains another risk and could undermine the recovery in global trade. Global trade volume growth is expected to rebound to 2.5% in 2024.
A surge in trade protectionism and industrial policies could lead to inefficiencies in global supply chains and reduce investment in emerging and developing economies.
A deeper downturn in the Chinese economy would also weigh on growth, led by commodity exporters and trade-intensive economies.
A brighter scenario where the US economy continues to surprise on the upside and inflation subsides quicker, therefore prompting central banks to reduce interest rates earlier than anticipated, would boost global growth.
In a nutshell, what happens in the U.S. matters for economies and financial markets around the world, though a bit more positive growth momentum for 2024 was built into the latest downgrade.
And while high debt levels, elevated inflation that shows no clear signs of moderating, and geopolitical noise really slow the progress and growth prospects of the rest of the global economy, what initially appears to drag commodity trading in South Africa and other emerging markets into a harsher and uglier world seems to be slowing a little bit.
The latest outlook by the World Bank might be a timely reminder for the UN, the G-7, or the WTO to pull out all stops to improve their cooperation that genuinely benefits the most vulnerable economies in the world.
Commodity Trading in South Africa: Unleashing Potential for Traders
Commodity trading in South Africa has come a long way in the past few years.
It comes with numerous benefits and many business opportunities for traders.
Get to know the history, advantages, and why you should trade with Finxo Capital , the key platform for commodities trading in South Africa.
Commodity Trading in South Africa: A Journey Through Time
There is a long history of commodity trading in South Africa that can be traced back to colonial times. In the early portion of the 20th century, commodities traded consisted mainly of agricultural products, including maize, wheat, sugar, and rice stocks.
Over time, the sector diversified into mining commodities – gold, platinum, diamonds, and other metals.
Thanks to a resilient mining industry in South Africa, many commodities over the decades have been seen as essential South African commodities.
The growing trading scene is now expanding via formal exchanges and regulatory frameworks that have made trading easier, faster, and more appealing to local and international traders alike.
Commodity Trading in South Africa: Benefits Galore
Packaged as an investment, the benefits of doing commodity trading in South Africa are broad.
They include using agricultural commodities, precious metals, and base metals such as gold, silver, and copper as hedges against inflation as they maintain their value in the long term.
It also provides an avenue for portfolio diversification for investors seeking to reduce the risk of investing entirely in equities.
Some assets are negatively correlated with others, thus protecting the equity in the market.
The high liquidity in the commodities market allows for quick sales and purchases of commodity assets. Therefore, traders can find opportunities to buy and sell when prices shift up and down respectively.
The overall inclusiveness of the country’s economy as a commodities hub, good infrastructure to mobilize people and goods around the country, and flexible trading conditions in relation to both producers and consumers, translating to lowering transaction costs, also add to the attractiveness of commodity trading in South Africa.
Commodity Trading in South Africa
The trading of commodities in South Africa has been known to expand since then, as the country has rich natural resources and an infrastructure that plays a major role in the commodities industry.
Commodities involve many products and form a significant portion of the world market, such as precious metals, agricultural products, as well as energy resources.
South Africa is considered one of the world’s leading producers of gold, platinum, and diamonds, and hence, traders in South Africa enjoy a strategic position for themselves by being in the commodities market.
The country has an established financial system as well as regulatory mechanisms and enterprise machines, which help in trading efficiently with immense safety.
Commodity Traders in South Africa
Commodity traders are an important part of the economy in South Africa.
They serve as a link between producers and consumers.
To do well, traders must keep close tabs on market trends, supply and demand, and the geopolitical factors that influence the price, and use those insights to get their hands on commodities that people need at a good price.
Traders often use sophisticated software to analyze the market and buy and sell commodities online.
These traders need to have a sharp eye for detail, flexibility, and brain elasticity because the trading platform in commodities is subject to violent changes in value due to speculation, seasonal fluctuations, and geopolitical events and trends.
Commodities Market in South Africa
The commodities market in South Africa is one of the most dynamic segments of the economy.
Comprising both physical trade and derivatives markets, these provide sophisticated financial instruments that can be used by both domestic and international investors to either hedge prices or for speculative trading on price movements.
The Johannesburg Stock Exchange (JSE) is the main platform for trading commodity derivatives through its extensive network of local and international investors.
Attracting traders in diverse commodities, and participation in this market is relatively easy, as traders are welcome to trade both palladium and any agricultural produce.
Commodity Trading Companies in South Africa
Commodity trading companies play a crucial role in facilitating the trade of commodities locally and internationally in South Africa.
These companies offer crucial services such as transport, storage, and market data to the commodities chain, and do this efficiently, accurately, and safely.
The focus of these companies is varied. Some are large multinational companies, while others are smaller, more specialized companies focusing on specific areas of trade.
Many serve as intermediaries connecting producers to markets, adding economic value by optimizing trade flows and improving the efficiency of the commodities market as a whole.
Commodity Trading in South Africa: Why Choose Finxo Capital?
Registered traders are recommended to choose Commodity trading in South Africa for the best trading experience.
Finxo Capital stands out from the competition in South Africa with a stunning platform for Commodity trading and incredible services.
Finxo Capital is in the lead here because of the range of commodities offered and cutting-edge technology.
The technology is designed to provide an easy and satisfactory trading experience for all classes of traders – novices and experts alike, providing accurate real-time market data and analytics to make informed decisions.
The user interface is also optimized and secure.
Commodity Trading in South Africa: The Role of Technology
Technology has changed the way commodity trade is handled in South Africa.
New technology like Finxo Capital provides commodity traders with features like algorithmic trading, automated alerts, and advanced market analysis to make trading activities more efficient and profitable.
Blockchain has been integrated into the trading process to increase transparency and security for traders.
The future looks bright for commodity trading in South Africa, and with the constant evolution of technology, more opportunities for growth and expansion are likely to arise.
Commodity Trading in South Africa: Future Prospects
The potential for commodity trading in South Africa looks bright moving forward.
We will explore some of the factors that contribute to the development of the commodities market in Africa’s most industrialized nation.
South Africa possesses great natural wealth, and fellow political institutions are investing in the infrastructure needed to exploit such resources.
Furthermore, South Africa enjoys a strategic position and many trade relations with other African nation-states; it could well become a center of regional and international growth.
If legal frameworks continue to mature and technology evolves optimally, commodity trading in South Africa should experience robust growth and dynamic development shortly.
Conclusion
There is a lot of potential in commodity trading in South Africa, especially for companies that are aware of its history and can benefit from it.
The country has a long history of commodity trading, so this market is a great opportunity for understanding investing trends.
Also, there are several benefits of commodity trading such as flexibility and low capital requirements.
Recently, trading commodities has become a popular field of investment due to technical advancements, so Finxo Capital is a great platform for commodity trading in South Africa.
It provides all the necessary tools and helpful support. As a result, commodities trading in South Africa is now accessible to everyone who wishes to be involved in this dynamic sector.