World Bank: Rising Oil Prices Threaten Economic Growth in China and several Other Countries

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World Bank: Rising Oil Prices Threaten Economic Growth in China and several Other Countries


World Bank officials said that the continuous increase in oil prices in the midst of war could hamper the growth of oil-importing countries, such as China, Indonesia, South Africa, and Turkey.

In his Tuesday briefing, Bank Vice President for Equitable Growth Indermit Gill said the war would cause a further setback to growth for already lagging emerging markets.

Very slow growth will also be felt in countries that are still lagging behind in their efforts to recover from the Covid-19 pandemic and are struggling amidst the onslaught of debt and inflation.

"War has exacerbated that uncertainty, hurting the most vulnerable people in the most fragile places. It's too early to say to what extent the conflict will change the outlook for the global economy," Gill said, as quoted by Reuters.


So far, several countries in the Middle East, Central Asia, Africa and Europe rely heavily on Russia and Ukraine for food. The two countries in conflict account for more than 20% of global wheat exports.

According to Gill, the World Bank's forecast will show that a 10% increase in oil prices lasting for several years could cut growth in oil-importing developing countries.

For the record, oil prices have more than doubled over the past six months.

"If this goes on, oil could cut the full percentage growth of oil importers like China, Indonesia, South Africa and Turkey," Gill said.

Gill added that South Africa was expected to grow at around 2% annually in 2022 and 2023 before war broke out in Europe. Meanwhile, Turkey should be able to grow 2%-3%, while China and Indonesia are each predicted to grow 5%.




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