IMF World GDP Growth Forecast
The IMF just released its latest World Economic Outlook. The WEO includes world gdp growth forecasts for 2008 and 2009. Not surprisingly, world growth is expected to decelerate to 4.1% in 2008 and 3.9% in 2009, compared to 5.1% in 2006 and 5.0% in 2007.
What does this mean for global steel demand growth? The steel nerds have looked at the historical relationship between world gdp growth and steel demand - read the post here. Based on this relationship, world steel demand is expected to grow by 50 million tonnes per year in 2008 and 2009, down from an average growth of 70 million tonnes per year in the 2002 to 2007 period. Of course there are factors other than gdp growth that influence steel demand, but the relationship between the two is pretty good and provides a simple heuristic for measuring the impact of an economic slowdown on steel demand.
It will be interesting to see what adjustments the IISI makes to its global steel demand forecast when the next outlook is released. The last Short Range Outlook released in April of this year projected steel demand growth of 80 million tonnes per year in both 2008 and 2009. Of course, global economic conditions have continued to deteriorate since April.
