by population growth as forecast by the UN population projections. Real commodity prices are assumed to be constant at current levels. This assumption mitigates concerns about potential endogeneity arising from using World Bank price forecasts. In the baseline scenario, global population growth is projected to slow slightly from 1.2 percent on average during 2010-16, to a 1 percent on average during 2018-27 (Figure 4). The slowdown is most pronounced in the EM7 countries. Real per capita income growth is expected to be broadly constant on average but slow by 0.2 percentage point in the EM7 countries. With continued per capita income growth, the elasticities of consumption of the EM7 economies are expected to decline (except for natural gas, maize and soybeans), by as much as one-third for coal.

The assumed scenario for these fundamental drivers would mean slower global and EM7 demand growth in 2018-27 relative to the post-global-crisis period 2010-16 for virtually all commodities considered here. The slowdowns would be particularly pronounced for metals, especially in China. Even so, the country would remain the single largest consumer of energy and metals. While per capita incomes in some of the other EMDEs would grow faster than in China, their current levels of commodity consumption are so much lower that their contribution to aggregate consumption growth would remain relatively modest.

By commodity, global metals consumption growth would slow by 1.4 percentage points to just under 3 percent on average during 2018-27. Because of still-high EM7 income elasticities and robust growth, the slowdown in EM7 consumption would be milder, by 0.4 percentage point to 4.9 percent. Growth in aluminum and copper would remain high, reflecting their high income elasticity of demand, while growth in zinc would be slower, reflecting a near-zero G7 income elasticity. Energy consumption growth would remain broadly steady at 2.3 percent globally but would slow by 0.4 percentage point to 3.1 percent in EM7 economies. BP (2018) expects energy growth to remain broadly steady between 2010-16 and 2017-25, while EIA (2017) expects growth to slow over this period. Rapid output growth in other EMDEs would shift the composition of global energy consumption toward more energy-intensive economies. Global crude oil consumption growth would remain broadly steady. Consumption growth of the foodstuffs included here would slow by 1 percentage point to 1.8 percent over 2018-27. For comparison, OECD (2017) expect a slowing in growth of consumption of cereals of about 1 percentage point. Rice and wheat would drive the slowdown because of their low-income elasticities and slowing population growth. In contrast, consumption growth of maize and soybeans would strengthen slightly.

# **4.2 Alternative growth paths**

The baseline scenario described in the previous section depends critically on per capita income growth. The implications of upside and downside risks to the income growth path are discussed in two alternative model-based scenarios. Finally, policy measures—including those unrelated to commodity demand—could also lead to different paths of commodity consumption.

The first is a faster-growth scenario. Kilic Celik, Kose, and Ohnsorge (forthcoming) estimate the impact on potential growth if countries implemented reforms to fill investment gaps, expand labor force participation by women and older workers, and improve life expectancy and educational outcomes. Each country is assumed to repeat its best ten-year improvement on record in each of these dimensions over the next decade. For EMDEs, this would imply raising investment by almost 3 percent of GDP, life expectancy by 2.5 years, enrolment and secondary school completion rates 13