INSUBCONTINENT EXCLUSIVE:
Lower oil prices mean less pressure on inflation.Just a couple of months ago, major oil trading houses were predicting the return of $100
Now, with oil prices at half that level, here's a look at what the slump means for the world economy
Energy importers like India and South Africa will benefit; oil producers such as Russia and Saudi Arabia will hurt
Central banks under pressure to raise interest rates will get a reprieve; those looking to revive prices, such as the Bank of Japan, face
another headwind.Ultimately, much depends on how world oil demand shapes up as it gets battered by a stronger dollar and global trade spats,
and how the biggest producers react.(: Crude Oil Prices Slump, Hit Lowest Level Since December 2017)Saudi Arabia sits between Russia on one
side, its ally in managing production to support prices, and the US, where President Donald Trump is sending Twitter messages to the
producer to get prices down
All eyes are on the Group of 20 meeting this week to see if a consensus on output emerges between the Saudis and Russians, and if that can
carry through to the OPEC gathering next week.Here's a Bloomberg Economics chart showing net oil imports (or exports) as a percentage of
GDP -- cheaper oil helps those at the top of the chart and hurts those at the bottom.What does it mean for global growthWith the northern
hemisphere winter approaching, the oil-price slump will cushion households and businesses during a period of slowing economic growth
Countries that import oil and have current-account deficits, such as South Africa, will also stand to benefit
China is the world's biggest importer of oil and is already battling a broader moderation in its economy amid a trade war with the US and
domestic challenges.(: Low Crude Prices To Limit Rise In Current Account Deficit - Report)What does it mean for inflationLower oil prices
mean less pressure on inflation and less pressure on central banks to raise interest rates
One example: Bloomberg Economics says the energy slump is a game changer for India and could mean the Reserve Bank of India shifts to a
neutral outlook.How will emerging markets handle the price dropEvery $10-per-barrel fall in oil prices boosts incomes by about 0.5 to 0.7
per cent of gross domestic product in major emerging market oil importers, Capital Economics analysts estimate.The same discount will cause
a 3 per cent to 5 per cent loss of GDP in most of the Gulf economies, and a slowdown of 1.5 per cent to 2 per cent of GDP in the UAE, Russia
and Nigeria, all on an annualized basis, according to the analysts.What does it mean for the world's biggest economyTrump has described
the slump in oil prices as the equivalent of a tax cut
Still, diminishing American reliance on imported oil due to the emergence of shale production will erode the positive economic consequences
