Global Implications of Lower Oil Prices
Staff Discussion Notes, July 14, 2015
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Bibliographic details
- Authors: Aasim M. Husain, Rabah Arezki, Peter Breuer, V. Haksar, Thomas Helbling, Paulo A Medas, Martin Sommer
- Published: July 14, 2015
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781513532417.006
Summary and key findings
- The sharp drop in oil prices is one of the most important global economic developments over the past year.
- The SDN finds that:
- (i) supply factors have played a somewhat larger role than demand factors in driving the oil price drop,
- (ii) a substantial part of the price decline is expected to persist into the medium term, although there is large uncertainty,
- (iii) lower oil prices will support global growth,
- (iv) the sharp oil price drop could still trigger financial strains, and
- (v) policy responses should depend on the terms-of-trade impact, fiscal and external vulnerabilities, and domestic cyclical position.
Analysis themes
- Drivers of price decline:
- Emphasis that supply factors have played a somewhat larger role than demand factors.
- Persistence and uncertainty:
- A substantial part of the price decline is expected to persist into the medium term, with large uncertainty highlighted.
- Macroeconomic effects:
- Lower oil prices will support global growth.
- Risks remain that the sharp oil price drop could trigger financial strains.
- Policy guidance:
- Policy responses should be tailored to the terms-of-trade impact, fiscal and external vulnerabilities, and the domestic cyclical position.
Publication and metadata
- Authors: Aasim M. Husain, Rabah Arezki, Peter Breuer, V. Haksar, Thomas Helbling, Paulo A Medas, Martin Sommer
- Publication date: July 14, 2015
- Series: Staff Discussion Notes No. 2015/015
- Issue: 015
- Pages: 41
- DOI: https://doi.org/10.5089/9781513532417.006
- Stock No: SDNEA201515
- ISBN: 9781513532417
- ISSN: 2617-6750
- Subject keywords: Commodities, Energy prices, Energy subsidies, Expenditure, Fuel prices, Oil, Oil prices, Prices
- Additional keywords: economic activity, Energy prices, Energy subsidies, exchange rate regime, external vulnerabilities, fiscal vulnerabilities, Fuel prices, fuel taxes and subsidies, Global, monetary policy, Oil, oil exporter, Oil price, Oil prices, price decline, price drop, price pass-through, SDN, windfall gain
Staff Discussion Note: "Global Implications of Lower Oil Prices", Staff Discussion Notes 2015, 015 (2015).