Sun, Feb 27, 2011 - Page 11 News List

IMF downplays losses from oil prices

Reuters, WASHINGTON

Higher oil prices should have a limited impact on the world economy if prices stay at current levels, the IMF said on Friday.

“The increase by some US$10 per barrel since mid-January has reflected increased oil supply risks due to events in the Middle East and North Africa, but -current market pricing suggests that this will be mostly a temporary price shock,” an IMF spokesman said.

However, if prices continue to rise because of further supply disruptions, the impact to global growth “could become appreciable,” the spokesman said, adding: “But that is not our, or the -markets’ expectation.”

Still, the IMF said the effect on global growth of increased oil supply risks was hard to predict.

The IMF raised its baseline forecast for this year’s oil prices to US$94.75 a barrel from US$89.50, according to a document submitted to G20 ministers meeting in Paris last week.

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