World Economy to Take Another Year to Recovery, Marubeni

Marubeni Research Institute’s director Akio Shibata said at the New Year party of Marubeni Tetsugen, which is Marubeni Corporation’s metal sales force, on Tuesday in Osaka world economy could take more time to recover at least until the yearend. He also forecasts the growth rate will be 8% for China and around 7% for India while the developed countries experience recession.

Mr. Shibata said higher investment for infrastructure including rail road in China could support Chinese consumption of steel, cement and other materials. He, however, expects Japanese economy, which depends heavily on offshore economy, especially on USA and China, couldn’t recover until 2010 when US economy starts to recover.

Mr. Shibata expects domestic lower activity of automobile production and construction impacts on steel demand. He said the automobile industry reduces the workforce under demand slump impacting on unemployment, consumer spending and consumer price. He expects the domestic steel production could decrease to 111 million tonnes in 2009 with around 37 million tonnes of export.

Mr. Shibata said price of resource and energy, which plunged after the financial crisis, could find bottom toward mid-2009 and would recover in 2010. He said the point is US housing market. He expects the subprime loan issue impacts on the world economy but when the economy recovery, price of resource and energy again increases due to higher demand for development of high population countries including BRICs.