A more positive outlook in China and India would help boost diamond sales this year, De Beers said on Friday in a further sign the world economy is on a slow path to recovery.

De Beers forecast moderate growth in jewellery demand this year, in a turnaround from a 12 percent decline in rough diamond prices last year, which it said was also in line with polished diamond prices.

De Beers, a unit of Anglo American, said its sales slid 16 percent last year, but a modest recovery in major jewellery markets during the holiday season helped stabilise prices.

“Despite macroeconomic concerns, demand for diamond jewellery continues to grow in the key markets of the US, China and Japan,” chief executive Philippe Mellier said.

Trading conditions in other developed markets were likely to be challenging, with stocks of unprocessed diamonds still high, De Beers added.

The holiday season for diamonds stretches from India’s Diwali in November to last week’s Chinese New Year, but questions remain about how long the good cheer will last.

“The holiday sales have shown a modest improvement in pricing, but this is likely to diminish somewhat but remain stable in our view,” Numis Securities analyst Cailey Barker said in a note to clients.

The diamond industry is dominated by De Beers and Russia’s state-controlled Alrosa. They vie for the title of biggest producer, but De Beers is ahead by value as its stones tend to attract a higher price.

Total sales at De Beers fell 16 percent to $6.1 billion (R54bn) last year. Core earnings fell 39 percent to $1.08bn.

Production dropped 11 percent to 27.9 million carats and De Beers said it planned no increase this year.

“If there is an upside, if we can see that the demand is slightly higher than what we are expecting, we could eventually ramp up into a bit more production,” Mellier said.

De Beers plans to invest $2.3bn to build a mine beneath its Venetia open-pit operation in South Africa. The company expects underground output to begin in 2021, yielding about 96 million carats during the mine’s life.

Anglo American bought the Oppenheimer family’s 40 percent stake in De Beers for $5.1bn last year, increasing its holding to 85 percent and ending the family’s 80-year ownership. Botswana owns the rest of the business, which was formed more than 120 years ago. – Reuters and Bloomberg