BERLIN, Sept 20: The International Monetary Fund sees runaway oil prices as the main risk to global economic growth, even if the world economy was likely to remain robust both this year and next year despite the fallout from Hurricane Katrina, a German government source said on Tuesday.
“On the whole, there are more risks than chances” for global growth and “oil prices are the main risk, one that needs to be taken seriously,” the source said, referring to the IMF’s autumn report scheduled to be published on Wednesday.
The economic fallout from Hurricane Katrina, which devastated large parts of the south of the US last month, would remain “bearable” even if it would make itself felt on US growth in third and fourth quarters of this year, the source said.
However, oil prices “risk weighing on consumer confidence,” it added.
Among the factors behind the surge in oil prices were bottlenecks in supply.
“Greater transparency would improve investor sentiment,” the source said. “The oil markets do not function transparently, not least because there is a cartel,” it suggested.
Germany believed that the Group of 20 leading economies, which include the big oil producers and consumers, could be a forum for discussions on the matter, the source continued.
On top of the risk from high oil prices, another risk for the global economy were the imbalances between the different economic regions. The IMF expected global growth this year to continue to be driven by China and the United States.
In fact, the fund was worried that the Chinese economy could be in danger of overheating, the source said.—AFP
