lundi 5 janvier 2015

Oil price collapse outlooks question GDP projections in many countries

Oil price collapse outlooks question GDP projections in many countries: winners and losers

Since June, oil price has fallen by 45%. The Wall Street Journal has listed the winners and the losers of this dramatic price drop.
Every country shall draft again its own growth forecasts, following the dramatic oil price collapse. Some projections need to be reduced and other need to be increased. Since June 2015, which recorded a peak for Brent to USD115 per barrel, the oil price fell dramatically by 45%, as the abundant offer, fed by North America shale gas fields, was far beyond a lifeless demand.
The Wall Street Journal has made a comprehensive study to identify the winners and the losers of this trend, if oil price stabilises at its current level for the incoming months.

Losers of oil price collapse outlooks

The Republic of Congo, the Equatorial Guinea and Angola, namely three Western African States, are listed as the most affected economies, as oil is a financial pillar for their economy. As such, a USD40 barrel represents some USD billion loss, something like 20% of their gross domestic product.
Saudi Arabia will be also affected and may loose by USD117 billion if oil price don’t change during the next six or eight months. Nevertheless, the Saudi economy is strong enough to face a lengthening period of plummeting price.
Russia, facing recession, may suffer from a loss of USD 100 billion, namely something like 5% of its GDP.
Iran may also suffer a loss of 5% of its GDP, that’s bad news for a country confronted with international sanctions combined with a drop of its national currency. Finally, Kuwait income may be reduced by USD32 billion, namely around a fifth of its GDP.

Winners of oil prices collapse outlooks

Djibouti, Seychelles and Kirghizstan will enjoy some 11% increase of their GDP, as oil imports absorb a major part of their incomes.
In the United States, the gain for consumers has been estimated to reach USD90 billion. Then, China, Germany and France may a GDP increase by one point.
According to Trevor Houser cabinet, the countries being main oil importers may gain USD500 billion.
Here is the map of winners and losers (source : Wall Street Journal) :