Oil slump could benefit developing nations – World Bank

The fall in global oil prices could benefit some developing countries if supported by stronger global growth, according to the World Bank. Its latest analysis suggests soft oil prices are […]

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By Priyanka Shrestha

The fall in global oil prices could benefit some developing countries if supported by stronger global growth, according to the World Bank.

Its latest analysis suggests soft oil prices are expected to continue in 2015 and for many oil-importing nations, lower prices contribute to growth and reduce “inflationary, external and fiscal pressures”.

However, weak oil prices could present “significant challenges” for major oil-exporting countries.

If lower oil prices persist, they could undermine investment in new exploration or development, potentially risking investment in some low-income countries or in unconventional sources such as shale oil and deep sea oil fields, the World Bank said.

The price of Brent crude oil has fallen below $50 (£33) to a six-year low.

Ayhan Kose, Director of Development Prospects at the World Bank added: “For policymakers in oil-importing developing countries, the fall in oil prices provides a window of opportunity to undertake fiscal policy and structural reforms as well as fund social programmes.

“In oil-exporting countries, the sharp decline in oil prices is a reminder of significant vulnerabilities inherent in highly concentrated economic activity and the necessity to reinvigorate efforts to diversify over the medium and long term.”