Emerging-market economies have contributed more than their industrial counterparts to global growth since 2000, one of the world’s largest mining companies, BHP Billiton, said on Monday.
”Led by China and India, economic growth in these economies has been strong with solid support from growth in domestic demand and strong trading activity with other emerging-market economies,” read a statement.
Over the past financial year there had been considerable weakening in most major developed economies.
The deflation of asset values within these economies had led to a reduction in wealth for consumers.
”This appears to have ended the past decade’s unsustainable consumer-debt-driven economic growth, particularly in the United States.”
However, a direct spillover into emerging market economies remained largely contained, the miner said.
The company added that it expected short-term global economic growth to slow as developed economies experienced further weakening in the coming quarters.
”Liquidity is likely to remain low and risk premia high for some time into the future.”
The company said that rising inflation, particularly in food and energy, alongside weakening economic growth, had restricted the flexibility of central banks to inject liquidity and stimulate their economies.
Higher inflation would also have a likely negative impact on emerging market economies through their adoption of tighter monetary policies.
”However, emerging market economies should remain relatively strong on the back of continued domestic infrastructure investment and regional trade.”
While short-term disruptions might occur, BHP Billiton expected that their long-term economic growth would remain robust as they continued on the path to industrialisation.
BHP Billiton released its results for the year ended June 30 on Monday.
The company announced a record attributable profit for the seventh consecutive year.
”We have achieved another year of record earnings, driven by excellent operating performance, cost control and the delivery of high margin growth projects into strong market conditions.”
Net profit climbed 14,7% to $15,39-billion, from $13,42-billion in the previous year. — Sapa