IMF warns of oil risk to global economy

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A report in a German newspaper says that a new report from the International Monetary Fund, to be released in the middle of September, will say that rising oil prices are a threat to global economic growth. The report will cite lack of refinery capacity, a problem that has grown worse over the years, is the main culprit because it leads to production bottlenecks. The IMF will predict in the report that the average cost for a barrel of oil in 2005 will be $51; earlier it had predicted that the price this year would average out to $46.5 per barrel. The average price per barrel of oil in 2006 will be forecast at $53 for 2006, up from a previous estimate of $43.75 per barrel. Other risks to the global economy to be cited by the IMF are the US account and budget deficits. The IMF, however, will stick to its earlier prediction that the global economy will grow by 4.3 percent in 2005 and by 4.4 percent in 2006. The report, the World Economic Outlook, is also said to predict that the German economy will grow by 1.0 percent this year, better than the 0.8 percent growth that the IMF predicted in the spring. However, the IMF will reportedly lower its prediction for German economic growth in 2006, from 1.9 percent down to 1.3 percent in the newest figures. Other predictions said to be included in the new report are that the US economy will grow 3.6 percent this year and by 3.5 percent in 2006, and that the eurozone economy as a whole will grow by 1.3 percent this year and by 2.0 percent next year. Handelsblatt, the German newspaper reporting the new reports figures, says that in the past numbers in early drafts have been found to closely parallel the numbers when the reports were released.