Mind the gap in multi-speed world economy after oil plunge

domingo 11 de enero de 2015 07:47 GYT

By Jonathan Spicer and Rajesh Kumar Singh

WASHINGTON/NEW DELHI Jan 11 (Reuters) - Robust recovery in the United States, a moribund euro zone and slowing Chinese growth reflect global splits which plunging oil prices are likely to widen.

On the face of it, lower energy bills should give consumers and companies more money to spend and boost economic growth, at least for oil importers.

But for those countries facing stagnation or even deflation the prospect of downward pressure on prices is more worrying.

The likelihood is that a near 60 percent fall in the price of oil - from above $115 in mid-2014 to just $50 - will see those already growing strongly pick up further, leaving the laggards trailing in their wake.

Central bankers in the United States and Europe have clearly expressed the divide over an oil dividend in recent weeks.

"It is a huge plus for consumers, for businesses," San Francisco Fed President John Williams said on Monday. A drag from weak economies elsewhere in the world would not counteract that, he calculated.

Williams is not alone. Minutes of the Fed's December meeting said some of those present thought "the boost to domestic spending coming from lower energy prices could turn out to be quite large".

Compare that with European Central Bank chief economist Peter Praet, speaking on the last day of 2014, days before euro zone inflation turned negative for the first time since 2009.   Continuación...