DEMAND from China will keep exports of Australian commodities at record levels despite a forecast dip in world economic growth, a forecaster said yesterday.
The September quarter export earnings report by the Australian Bureau of Agricultural and Resource Economics released yesterday shows sales are likely to rise slightly in the next year to $214 billion, from a previously forecast $212 billion.
But ABARE warned nervous global financial markets could make it more difficult for miners to borrow money to expand projects or start new ones.
"As financial institutions seek to repair their balance sheets, extension of credit for business investment could remain constrained, potentially dampening the speed of recovery (in major economies)," ABARE said in the report.
"At the same time, sustained inflationary pressures in a number of major world economies could limit the scope for accommodative monetary policy to stimulate the economic recovery."
The best performers are expected to be iron ore and coal, commodities that have enjoyed record prices this year and have boosted the profits of producers like BHP Billiton and Rio Tinto.
Exports of minerals and metals are forecast at $90 billion, 25 per cent higher than a year earlier, while earnings from energy commodities are forecast to jump 98 per cent to $90 billion.
"The story is still quite strong really, underpinned by iron ore and coal," National Australia Bank energy and minerals economist Gerard Burg said.
"They are our largest exports and continue to be of key importance."
Global economic growth is expected to slow to about 3.9 per cent this year, and 3.8 per cent next year, compared with 5 per cent last year.
ABARE cut price forecasts for oil, gold, nickel and zinc but lower prices will be offset by a forecast drop in the local currency, which will boost export earnings.
The Australian dollar may average US85 in 2008-09, down from a previous forecast US90.
The price of West Texas Intermediate crude oil may average $US107 a barrel in 2008, compared with an earlier estimate of $US122 a barrel after crude reached a record $US147.27 in mid-July.
