WASHINGTON, D.C.: The plunge in oil prices since June may hurt some crude exporters but is overall a good thing for the world economy, International Monetary Fund (IMF) Managing Director Christine Lagarde said on Monday (Tuesday in Manila).
“There will be winners and losers, but on a net basis it’s good news for the global economy,” she said in Washington.
Oil prices have fallen sharply since late June, losing around 30 percent as supplies increase and global demand for oil grows more slowly.
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’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.
Crude oil exporters “are taking a hit, for some of them it’s a calculated hit,” Lagarde said, in a reference to the Gulf producers like Saudi Arabia, which have been reticent to cut production to firm up prices.
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.
Lagarde was speaking at a conference of corporate chief executives sponsored by the Wall Street Journal. AFP