📝 Activity To Pick Up In China By Second Half of 2022: Natixis

In 2Q 2022 global demand for commodities and commodity prices are temporarily weakened by the fall in activity in China resulting from its COVID wave. But in the second half of 2022, activity will pick up vigorously in China, driven by stimulus measures, and commodity prices will rise. Commodity producers have learned to extract monopoly rents and keep commodity prices high. For example crude oil, whose high prices results from production curbs by OPEC countries. Given the acceleration in wages, lasting pressures on commodity prices and the coming acceleration in Chinese growth, inflation is likely to be permanent and not fall spontaneously at all. - Natixis Global Research