Tags: Kim | oil | global | growth

World Bank President Kim: Oil Price Plunge Could Boost Global Growth 20 Percent

By    |   Thursday, 22 January 2015 12:30 PM

Many experts have said the U.S. economy will benefit greatly from the plunge of oil prices to 5 1/2-year lows, and World Bank President Jim Yong Kim says the global economy will get a boost too.

"Our projection is around 3 percent [for world growth this year], so you could see a 15 to 20 percent increase in growth if those oil prices stay low," he told CNBC.

That's because historical data indicate a 30 percent decline in oil prices would boost global GDP by half a percentage point, Kim said.

Oil prices have dropped 57 percent since late June.

If oil prices fail to rebound soon, income will shift to oil-importing nations from oil exporters, Kim noted.

"We are really concerned about Venezuela, and when you talk about Venezuela, it is not just Venezuela," he explained. "It is all the countries they have been supplying oil to at very low prices — Cuba, Haiti, Honduras."

Meanwhile, Steve Beaman, chairman of the Society to Advance Financial Education, told Newsmax TV's "MidPoint" show that he doesn't put much stock in forecasts that oil and gasoline prices will rebound soon.

"The reality is the revolution in shale oil production has truly changed the dynamics in oil pricing," pushing supply up and prices down, he said. U.S. oil production has hit its highest level in at least 31 years.

"Granted, global [economic] growth over a long period of time will come back and grow," but many analysts are cutting their global growth forecast for this year, Beaman noted.

"I don't see anything running those prices up right now, because there's plenty of supply and a decline in demand."

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Many experts have said the U.S. economy will benefit greatly from the plunge of oil prices to 5 1/2-year lows, and World Bank President Jim Yong Kim says the global economy will get a boost too.
Kim, oil, global, growth
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2015-30-22
Thursday, 22 January 2015 12:30 PM
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