OIL: PRICES TO REMAIN HIGH, EXPERTS SAY.

Europe Energy, September, 2005

The IMF warned on September 21 that high and volatile oil prices pose a "significant" risk to the global economy, with a one in five chance that the cost of crude could rise above $80 a barrel by the end of the year. In its half-yearly health check of the world economy, the fund highlighted dearer energy as one of a number of threats to the robust performance of recent years. The IMF's chief economist, Raghuram Rajan, said: "Higher oil prices are a clear and present danger." Recent increases had been driven by supply shortfalls and potential future shortages, he added.

There were signs, the IMF said, that consumer confidence was being adversely affected and inflationary pressures were being stoked up by high oil prices. "To date, the impact of higher oil prices...

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