MercoPress. South Atlantic News Agency

In spite of oil IMF forecasts 4,6% expansion

International Monetary Fund Managing director Rodrigo Rato admitted in Berlin that the high cost of oil could restrict global economic growth, but other compensatory factors will not force a reduction in expansion forecasts

"We are looking at a robust economy. It's probably true that the price of oil could be restricting global economic growth by 0,3/0,4%, but other forces will compensate for that reduction", emphasized Mr. Rato.

"For the time being we see no need to reduce the growth forecast for the world economy which remains at 4,6%", concluded the new IMF Managing Director.

However in Paris the International Energy Agency, AIE, forecasted that world demand for oil will grow this year 2,3 million barrels per day, the highest ever since 1980.

AIE estimates that the daily world demand for oil will reach 81,1 million barrels, 300,000 above the original forecast mainly because of greater demand from Brazil and India.

But AIE underlines that the world's oil demand locomotive is China that is expected to increase its daily demand by 790,000 barrels, equivalent to 14,3% growth. Electricity, transport and petrochemicals could push demand even further in China for the second half of the year, probably and additional 1,2 million barrels.

The Organization of Petroleum Exporting Countries, OPEC, in its most recent meeting agreed to increase daily production by two million barrels, and an additional 500,000 barrels in July with the purpose of containing soaring prices.

Highly industrialized countries have been pressing OPEC to increase production to avoid thwarting world economic recovery.

But OPEC is not unanimous and several members believe the Iraq conflict, lack of sufficient refining capacity in the US (to face the summer demand increase) and speculation are mainly to blame for the higher prices.

Venezuela and Nigeria among others favour a review of daily OPEC production if the barrel drops eight US dollars or reaches the group's reference band of 22 to 28 US dollars.