FRANKFURT - Surging oil prices will shave between 0.25 and 0.5 percentage points off global economic growth this year, the managing director of the International Monetary Fund Rodrigo Rato said in a newspaper interview published Wednesday.
"The high price of oil will cut growth of the global economy by at least 0.25-0.50 percentage points again this year," Rato told the business daily Handelsblatt.
Oil prices surged to new records this week, topping a high of 58.28 dollars in New York on Monday, even if they have since eased from their highs in profit-taking.
"We've revised upwards sharply our calculations for the annual average price of oil this year," Rato said.
While in September the IMF had been pencilling in an average annual oil price of 37.30 dollars per barrel this year, it raised that forecast to 46.50 dollars in March. And now the price was expected to average around 51.90 dollars, Rato said.
"High oil prices are increasingly becoming a downside risk" to global growth, he warned.
"The same can be said of the widening global current account deficits, the difference between growth and savings rates," the IMF chief continued.
"The economies of Asia, China and the United States are dynamic, while Europe and Japan are lagging behind."
So far, the global economy had been able to absorb such imbalances "in an orderly fashion ... But if oil prices, inflation and currency movements trigger abrupt changes, the situation could deteriorate dramatically," Rato said.
04/06/2005 07:06 GMT