IMF warns of threat to global growth as pressure on oil supplies mount
Posted by Big Gav in peak oil
The Australian reports that the IMF is worried about oil scarcity -
IMF warns of threat to global growth as pressure on oil supplies mount.
A SIGNIFICANT strain on oil supply could have a detrimental effect on world growth, the International Monetary has Fund warned.
In a working paper that will form part of its World Economic Outlook to be released next week, the IMF said that it expected oil supply to become more thinly spread over the coming years because of rapidly increasing demand for oil in emerging market economies such as China, and the fact that maturing oil fields will limit some producers' ability to add new production.
The effect on world growth will ultimately depend on the extent and evolution of oil scarcity, which remain uncertain, according to the IMF.
The fund said that gradual and moderate increases in oil inadequacy would have a small impact on medium-term global economic growth.
A sizeable downshift in oil supply trend growth of 1 percentage point would slow annual global growth by less than 0.25 per cent in the medium and long term.
However, the IMF cautioned that risks remain that it could be much more significant.
It said that gradual and moderate increases in oil scarcity may not present a big constraint on global growth, but "the wealth transfer from oil importers to exporters would increase capital flows and widen current account imbalances.
Adverse effects could be much larger, depending on the extent and evolution of oil scarcity and the ability of the world economy to cope with increased scarcity," the IMF said.
It added that it was uncertain whether the world economy could adjust as smoothly to increased scarcity, given redistribution and sectoral shifts.
Concern about resources being thinly spread is more widespread now than a decade or two ago.
It also said that if tensions between demand and supply factors intensified, oil prices could spike to match the $US148 a barrel record levels reached in 2008.
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