IMF Says Oil Decline Good for Economy

IMF said recent decline in oil prices will help boost global economy.

According to IMF chief Christine Lagarde, it is good news for the global economy. For the United States, low energy prices would help accelerate the economic growth to a 3.5 per cent next year from the October forecast of 3.1 per cent, she said, adding that Europe is also expected to benefit from lower oil prices.

Lagarde, however, noted that the euro zone also faces a risk of the “new mediocre’’, and described it as an economy marked by slow growth, low inflation and high unemployment.

But at the same time, she asserted that reluctant political leaders need to adopt more job-friendly labour market reforms, aggressive and innovative monetary policy and other structural reforms.

Oil prices tumbled to multi-year lows last week after the Organization of the Petroleum Exporting Countries decided to maintain its production quotas, rather than lowering its output target.