Gulf News reported that the political turmoil in the Middle East and North Africa and the consequent spike in global energy prices could derail the nascent global economic recovery.
The World Bank and International Monetary Fund warned l said that if oil prices were to rise sharply and durably global growth could slow by between 0.3 and 1.2 percentage points in 2011 and 2012, respectively.
Economists have warned that the fragile global economy is fraught with risks ranging from high unemployment and sovereign indebtedness across the developed world and rising risk of inflation and asset bubbles in the emerging markets.
Dr Gerard Lyons chief economist of Standard Chartered Group said that "High oil prices for a prolonged period could mean a slowdown in recovery in the developed world and acceleration in inflationary pressures in the emerging markets."
Mr Francisco Blanch commodity strategist Merrill Lynch said that "We recently upgraded our average second quarter 2011 Brent crude oil forecast to USD 122 per barrel from USD 86 per barrel and we believe prices could temporarily break through USD 140 per barrel during the next 3 months."
On a recent visit to Dubai, Mr Nouriel Roubini the economist who predicted the global financial crisis warned that oil prices at USD 140 per barrel will result in a double dip recession in some advanced economies. A 15% to 20% increase in oil prices will stall economic growth in the US, Eurozone and Japan and cause growth in emerging markets to decelerate.
(Source: www.steelguru.com)