IMF report to warn of oil price threat to global economy
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IMF report to warn of oil price threat to global economy Heather LongSaturday August 20, 2005The Guardian
The International Monetary Fund is to warn that record oil prices pose a significant risk to the global economy and could thwart growth next year, according to an apparent leak of its forthcoming World Economic Outlook.
Oil prices spiralled to over $67 a barrel earlier this week and many analysts have cautioned the economy could be headed for a recession if such high prices continue.
Yesterday the price of oil jumped $1 to above $65 a barrel after news that rockets hit two US warships docked in Jordan and another in southern Israel.
The IMF, normally known for cautiously worded reports, is expected to warn that, "all in all, the dangers have become greater" from oil prices, when it puts out its six-monthly global outlook in mid-September.
The Washington-based think-tank predicts average oil prices of $51 a barrel this year. This might appear to be a low figure after recent crude prices topping $60 a barrel, but last year's average oil price was under $40. The IMF outlook for 2006 is even higher, at $53 a barrel.
In the IMF's last report in April, it predicted that the global economy had "become less balanced" with unstable oil prices and worrying US current account and budget deficits. September's report is expected to conclude that the situation has become even more grave.
The critical leak of next month's World Economic Outlook surfaced yesterday in Handelsblatt, the weekday German financial newspaper.
The IMF predicts global growth will reach 4.3% this year and 4.4% in 2006, Handelsblatt said. These estimates are much lower than the 6% average growth in the global economy in late 2003 and early 2004.
The eurozone continues to lag behind other regions of the world and is expected to grow by only 1.3% in 2005. The IMF's bleaker forecasts came from worries over frequent oil production bottlenecks and a lack of refineries to meet world demand, according to the German paper.
Separately, British consumer confidence plummeted to its lowest level this year as shoppers became increasingly aware of the state of their personal finances and fearful of prospects for the economy.
The measure of the economic "feel-good factor" compiled by the market data group Experian fell heavily. Its index measuring the balance of those expecting to spend more on major purchases in the coming year had dropped to five in July, from 19 in January, it said.
"In spite of steady earnings growth and a stable labour market, perceptions of the country's economic situation and people's own household finances have worsened over the past few months," said Addween Sacha, a senior consultant at Experian.
The perceptions of the job market are especially weak according to the survey, even though Britain's unemployment rate is 4.7%, much lower than continental Europe or even the United States.
"Consumer confidence fell in almost every region of the UK, most notably East Anglia and the north, where confidence was previously high," said Ms Sacha.
IMF report to warn of oil price threat to global economy Heather LongSaturday August 20, 2005The Guardian
The International Monetary Fund is to warn that record oil prices pose a significant risk to the global economy and could thwart growth next year, according to an apparent leak of its forthcoming World Economic Outlook.
Oil prices spiralled to over $67 a barrel earlier this week and many analysts have cautioned the economy could be headed for a recession if such high prices continue.
Yesterday the price of oil jumped $1 to above $65 a barrel after news that rockets hit two US warships docked in Jordan and another in southern Israel.
The IMF, normally known for cautiously worded reports, is expected to warn that, "all in all, the dangers have become greater" from oil prices, when it puts out its six-monthly global outlook in mid-September.
The Washington-based think-tank predicts average oil prices of $51 a barrel this year. This might appear to be a low figure after recent crude prices topping $60 a barrel, but last year's average oil price was under $40. The IMF outlook for 2006 is even higher, at $53 a barrel.
In the IMF's last report in April, it predicted that the global economy had "become less balanced" with unstable oil prices and worrying US current account and budget deficits. September's report is expected to conclude that the situation has become even more grave.
The critical leak of next month's World Economic Outlook surfaced yesterday in Handelsblatt, the weekday German financial newspaper.
The IMF predicts global growth will reach 4.3% this year and 4.4% in 2006, Handelsblatt said. These estimates are much lower than the 6% average growth in the global economy in late 2003 and early 2004.
The eurozone continues to lag behind other regions of the world and is expected to grow by only 1.3% in 2005. The IMF's bleaker forecasts came from worries over frequent oil production bottlenecks and a lack of refineries to meet world demand, according to the German paper.
Separately, British consumer confidence plummeted to its lowest level this year as shoppers became increasingly aware of the state of their personal finances and fearful of prospects for the economy.
The measure of the economic "feel-good factor" compiled by the market data group Experian fell heavily. Its index measuring the balance of those expecting to spend more on major purchases in the coming year had dropped to five in July, from 19 in January, it said.
"In spite of steady earnings growth and a stable labour market, perceptions of the country's economic situation and people's own household finances have worsened over the past few months," said Addween Sacha, a senior consultant at Experian.
The perceptions of the job market are especially weak according to the survey, even though Britain's unemployment rate is 4.7%, much lower than continental Europe or even the United States.
"Consumer confidence fell in almost every region of the UK, most notably East Anglia and the north, where confidence was previously high," said Ms Sacha.
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