IMF Says Oil Price Plunge ‘Good News’ for World Economy

Washington – The drop in oil prices since the month of June may ‘hurt some crude exporters but is overall a good thing for the world economy,’ International Monetary Fund Managing Director Christine Lagarde said Monday (Tuesday, PHL time).

Lagarde said “there will be winners and losers, but on a net basis it’s good news for the global economy,”

Lagarde was speaking at a conference of corporate chief executives sponsored by the Wall Street Journal, report said.

The prices of oil have fallen since late June, losing around 30 percent as supplies increase and global demand for oil grows more slowly, report said. While some exporters are hurting from the price fall, overall it will add significantly to global growth as consumers and businesses pay less for energy, it added.

“It’s likely to be an additional 0.8 percent (of growth) for most advanced economies, because all of them are importers of oil, whether you look at US, Japan, certainly Europe… and China,” she said.

Lagarde, referring to the Gulf producers like Saudi Arabia, which have been reticent to cut production to firm up prices, said crude oil exporters “are taking a hit, for some of them it’s a calculated hit.”

In October, the IMF cut its forecast for global growth this year to 3.3 percent and to 3.8 percent in 2015, citing stagnation in Europe and Japan and the slowdown in emerging economies, report said.

Source: GMA News Online