- The International Monetary Fund is to warn that record
oil prices pose a significant risk to the global economy and could thwart
growth next year, according to an apparent leak of its forthcoming World
Economic Outlook.
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- Oil prices spiralled to over $67 a barrel earlier this
week and many analysts have cautioned the economy could be headed for a
recession if such high prices continue.
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- Yesterday the price of oil jumped $1 to above $65 a barrel
after news that rockets hit two US warships docked in Jordan and another
in southern Israel.
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- The IMF, normally known for cautiously worded reports,
is expected to warn that, "all in all, the dangers have become greater"
from oil prices, when it puts out its six-monthly global outlook in mid-September.
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- The Washington-based think-tank predicts average oil
prices of $51 a barrel this year. This might appear to be a low figure
after recent crude prices topping $60 a barrel, but last year's average
oil price was under $40. The IMF outlook for 2006 is even higher, at $53
a barrel.
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- In the IMF's last report in April, it predicted that
the global economy had "become less balanced" with unstable oil
prices and worrying US current account and budget deficits. September's
report is expected to conclude that the situation has become even more
grave.
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- The critical leak of next month's World Economic Outlook
surfaced yesterday in Handelsblatt, the weekday German financial newspaper.
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- The IMF predicts global growth will reach 4.3% this year
and 4.4% in 2006, Handelsblatt said. These estimates are much lower than
the 6% average growth in the global economy in late 2003 and early 2004.
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- The eurozone continues to lag behind other regions of
the world and is expected to grow by only 1.3% in 2005. The IMF's bleaker
forecasts came from worries over frequent oil production bottlenecks and
a lack of refineries to meet world demand, according to the German paper.
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- Separately, British consumer confidence plummeted to
its lowest level this year as shoppers became increasingly aware of the
state of their personal finances and fearful of prospects for the economy.
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- The measure of the economic "feel-good factor"
compiled by the market data group Experian fell heavily. Its index measuring
the balance of those expecting to spend more on major purchases in the
coming year had dropped to five in July, from 19 in January, it said.
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- "In spite of steady earnings growth and a stable
labour market, perceptions of the country's economic situation and people's
own household finances have worsened over the past few months," said
Addween Sacha, a senior consultant at Experian.
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- The perceptions of the job market are especially weak
according to the survey, even though Britain's unemployment rate is 4.7%,
much lower than continental Europe or even the United States.
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- "Consumer confidence fell in almost every region
of the UK, most notably East Anglia and the north, where confidence was
previously high," said Ms Sacha.
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- Guardian Unlimited © Guardian Newspapers Limited
2005
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- http://www.guardian.co.uk/oil/story/0,11319,1552987,00.html
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