Moody's: Global economy to benefit from low oil prices

Low oil prices will be positive for global economic growth in 2015, Moody's says

Moody's: Global economy to benefit from low oil prices
World Bulletin/News Desk
Low oil prices will be positive for global economic growth in 2015, the credit rating agency Moody’s said on Wednesday. 

The exact impact will vary from country to country, Moody's said in a statement on its website, adding that oil exporting countries will face challenges if prices keep falling below the agency's base forecast for 2015, at between $80 and $85 per barrel.

"Oil exporting countries that are best placed to withstand these challenges will be those that have the greatest policy flexibility and a wide array of counter-cyclical policy tools, including floating exchange rates and large foreign exchange reserves," said Lucio Vinhas de Souza, Moody's managing director.

Oil exporting countries like Russia and Venezuela will face challenges due to their dependence on revenues from oil, the agency predicted.

In contrast, oil producers that use oil-related revenues for capital expenditure or place it in a reserve - such as Saudi Arabia - have higher fiscal buffers and could adjust more readily to a lower oil price, according to Moody's.

In November 2014, Moody's revised its oil price forecast down to between $80 and $85 a barrel in 2015, approximately $20 lower than the rating agency's May 2014 estimate.

According to the agency, oil importing countries which have high inflation and a large oil import share in their budget will benefit from the low oil prices, according to the agency.

The agency forecasted that a $60 per barrel oil price would benefit private consumption and economic rebalancing in China.

Güncelleme Tarihi: 10 Aralık 2014, 20:06