Transcript Document

The Great Plunge in Oil Prices:
Causes, Consequences, and Policy Responses
May 4, 2015
Martin Raiser
[email protected]
Country Director
World Bank Country Unit
Turkey
This Presentation is Based on
•
The Great Plunge in Oil Prices:
Causes, Consequences and Policy Responses
by Baffes, Kose, Ohnsorge, and Stocker
World Bank Policy Research Note, No: 1
•
Commodity Markets Outlook --- April 22, 2015
(January, April, July, and October)
•
Turkey Focus Note --- December 2014
•
Global Economic Prospects --- June 2015
(January and June)
http://www.worldbank.org/en/publication/global-economic-prospects
http://www.worldbank.org/turkey
2
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986; soft prices in 2015-17
2. What are the causes?
Mostly supply driven; other long- and short-term factors
3. What are the economic and financial consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility; regional spillovers
4. What are the main policy implications?
Fiscal and monetary adjustments; subsidy and tax reforms…
3
Oil Price Decline:
Third Largest in Recent History
Real Oil Price
(US$ per barrel)
200
OPEC
abandons
price
targeting:
-66.4% in
82 days
170
140
110
OPEC abandons price
targeting:
-51.2% in 83 days
First Gulf War:
-47.9% in 71
days
2008 financial
crisis:
-76.7% in 113
days
80
50
20
Jan-14
May-10
Sep-06
Jan-03
May-99
Sep-95
Jan-92
May-88
Sep-84
Jan-81
May-77
Sep-73
Jan-70
-10
Source: World Bank.
Note: Oil price deflated by U.S. CPI, normalized to 1 in December 2014. The last observation is for March 2015 (assuming CPI level constant from February).
Significant decline episodes: cumulative change over a 6-month period.
4
Other Commodity Prices:
Downward Pressures
Natural Gas and Crude Oil Prices
(US$/bbl)
Impact of Oil on Other Commodity Prices
(US$/mmbtu)
120
(Elasticity)
13
0.4
12
100
11
0.3
10
0.2
80
9
8
60
Crude oil (LHS)
Natural gas (RHS)
7
Raw
materials
Metals
Food
0.0
Fertilizers
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
6
Jul-10
40
Jan-10
0.1
Source: World Bank, Baffes (2007)
Note: Left panel:“mmbtu”, Million British thermo unit. “Crude oil” is unweighted price of WTI, Dubai and Brent oil prices. “Natural gas” is
European natural gas price. The last observations are for March 2015.
5
Low Commodity Prices Going Forward
Commodity Price Indices
(Index=100 in 2010, Nominal in US$)
140
Energy
120
Metals
100
Agriculture
80
60
40
20
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: World Bank.
Note: The last historical observation is for 2014, the last forecast is for 2017. The energy index includes oil, natural gas and coal. The agriculture index
includes grains, edible oils, oil seeds, and tropical commodities. The metals index includes the six base metals (aluminum, copper, lead, nickel, tin and zinc)
and iron ore. Forecast values for energy, metals and agriculture prices in 2017 are, respectively, 39%, 31%, and 21% lower than their 2011 levels.
2020
6
Global Growth:
Net Positive Impact but Many Mitigating Factors
Positive impact on global growth (based on model simulations)
• 45 percent supply-driven decline could add 0.7 to 0.8 percent to global GDP
But mitigating factors (affecting the growth forecasts)
•
•
•
•
•
Crisis legacies and weak confidence
Monetary policy constraint
Changing relationship between oil and activity
Reduced investment in new oil exploration or development
Weak demand
13
Past Oil Price Drops Followed by Mixed
Performance
Global GDP Growth
(Year-on-year, in percent)
6
1986Q2
1991Q1
1998Q1
2001Q4
2008Q4
2014Q4
4
2
0
-2
-4
-6
-8
-6
-4
-2
0
Quarters
2
4
6
8
Source: World Bank.
Note: Global GDP growth computed on the basis of a weighted average (using 2010 USD GDP weights) of countries for which quarterly national account
data is available. Time “0” is the quarter of the trough in significant oil price decline episodes. “-8” corresponds to 8 quarters (2years) before that trough
and “8” correspond to 8 quarters after.
8
Global Inflation:
A Temporary Dip in 2015
Inflation Around Drops in Oil Prices
Global Inflation
(Year-on-year, percent)
(Year-on-year, percent)
7
1986Q2
1991Q1
1998Q1
2001Q4
2008Q4
6
5
4
5
80
Inflation (LHS)
Projection (LHS)
4
Oil price changes (RHS)
40
3
0
3
2
2
-40
1
1
0
-1
-8
-6
-4
-2
0
2
4
6
8
0
2010
-80
12
14
16
Source: World Bank.
Note: Left panel: Inflation in high income countries. Time “0” is the quarter of the trough in significant oil price decline episodes. “-8” corresponds to 8
quarters (2years) before that trough and “8” correspond to 8 quarters after. “Inflation” indicates a consumption weighted average of inflation rates of 16
members of the G20. “Inflation projection” is based on country specific VAR models for these 16 countries (including year-on-year growth in consumer
prices, producer prices, oil prices (in local currency), the nominal effective exchange rate and the deviation of industrial production from its HodrickPrescott-filtered trend)
9
The Impact on Turkey:
Positive Overall, but no Game Changer so far
• Gross impact
on growth of
a 40% price
fall would be
around 1.5
ppts – offset
by weak
global
demand and
investor
confidence
13
The Impact on Turkey:
Positive Overall, but no Game Changer so far
• Gross impact
on inflation
around 1.2
ppts – offset
by exchange
rate and food
prices
13
The Impact on Turkey:
Positive Overall, but no Game Changer so far
• Impact on
the CAD
around 1.5
ppts –
headline
affected by
gold exports
13
The Impact on Turkey:
Positive Overall, but no Game Changer so far
13
Thanks!
Questions & Comments
Martin Raiser
[email protected]
FULL PRESENTATION OF THE PAPER
The Great Plunge in Oil Prices:
Causes, Consequences, and Policy Responses
April 15, 2015
M. Ayhan Kose
[email protected]
Development Prospects Group
World Bank Group
This Presentation is Based on
•
The Great Plunge in Oil Prices:
Causes, Consequences and Policy Responses
by Baffes, Kose, Ohnsorge, and Stocker
World Bank Policy Research Note, No: 1
•
Commodity Markets Outlook --- April 22, 2015
(January, April, July, and October)
•
Global Economic Prospects --- June 2015
(January and June)
http://www.worldbank.org/en/publication/global-economic-prospects
18
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986; soft prices in 2015-17
2. What are the causes?
Mostly supply driven; other long- and short-term factors
3. What are the economic and financial consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility; regional spillovers
4. What are the main policy implications?
Fiscal and monetary adjustments; subsidy and tax reforms…
19
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986; soft prices in 2015-17
2. What are the causes?
Mostly supply
3. What are the consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility
4. What are the policy implications?
Subsidy and tax reforms; fiscal and monetary adjustments
5. What can the World Bank do?
Support policies
20
Oil Price Decline:
Third Largest in Recent History
Real Oil Price
(US$ per barrel)
200
OPEC
abandons
price
targeting:
-66.4% in
82 days
170
140
110
OPEC abandons price
targeting:
-51.2% in 83 days
First Gulf War:
-47.9% in 71
days
2008 financial
crisis:
-76.7% in 113
days
80
50
20
Jan-14
May-10
Sep-06
Jan-03
May-99
Sep-95
Jan-92
May-88
Sep-84
Jan-81
May-77
Sep-73
Jan-70
-10
Source: World Bank.
Note: Oil price deflated by U.S. CPI, normalized to 1 in December 2014. The last observation is for March 2015 (assuming CPI level constant from February).
Significant decline episodes: cumulative change over a 6-month period.
21
A Sharp Drop in Oil Prices Since June 2014
Oil Prices
Cumulative Changes in Commodity Prices
(US$ per barrel)
(Percent change)
140
10
0
120
-10
100
-20
-30
80
-40
60
-50
40
2008
2014Q2-2015Q1
2011Q1-2014Q2
-60
2009
2010
2012
2013
2014
Oil
Agriculture
Metals and
minerals
Source: World Bank.
Note: Left panel: Monthly average of WTI, Dubai, and Brent oil prices. Last observation is for March 2015. Horizontal line denotes $105 per barrel, the average
for January 2011-June 2014.
Right panel: Commodity prices: average of 21 agricultural goods, and 7 metal and mineral commodities.
22
Oil Price Likely to Stay Weak
Oil Price Forecast
(Percent change relative to previous year)
2014
2015 Baseline Forecast
2015 Futures Prices
0
-10
-20
-30
-40
-50
Source: World Bank.
Note: Oil price defined as unweighted average of Dubai, Brent, and WTI prices.
The baseline forecast in 2015 is $53/bbl. The 2015 futures price represents the average of all closing futures contracts (11 contracts, May-Dec 2015) for
the trade index of 5 Trading Days prior to Apr. 10th, 2015. This price (which is equal to $56.95) represents the average of Brent WDI & Dubai futures
contracts.
23
Low Commodity Prices Going Forward
Commodity Price Indices
(Index=100 in 2010, Nominal in US$)
140
Energy
120
Metals
100
Agriculture
80
60
40
20
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: World Bank.
Note: The last historical observation is for 2014, the last forecast is for 2017. The energy index includes oil, natural gas and coal. The agriculture index
includes grains, edible oils, oil seeds, and tropical commodities. The metals index includes the six base metals (aluminum, copper, lead, nickel, tin and zinc)
and iron ore. Forecast values for energy, metals and agriculture prices in 2017 are, respectively, 39%, 31%, and 21% lower than their 2011 levels.
2020
24
Supply Uncertainty Leads to
Higher Volatility
Oil Price Volatility
(Percent)
8
OPEC abandons
price targeting
6
First Gulf war
2008 financial crisis
OPEC
abandons
price
targeting
4
2
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0
Source: World Bank.
25
Other Commodity Prices:
Downward Pressures
Natural Gas and Crude Oil Prices
(US$/bbl)
Impact of Oil on Other Commodity Prices
(US$/mmbtu)
120
(Elasticity)
13
0.4
12
100
11
0.3
10
0.2
80
9
8
60
Crude oil (LHS)
Natural gas (RHS)
7
Raw
materials
Metals
Food
0.0
Fertilizers
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
6
Jul-10
40
Jan-10
0.1
Source: World Bank, Baffes (2007)
Note: Left panel:“mmbtu”, Million British thermo unit. “Crude oil” is unweighted price of WTI, Dubai and Brent oil prices. “Natural gas” is
European natural gas price. The last observations are for March 2015.
26
Food Commodities:
Impact of Lower Cost of Energy
Impact of Oil Prices on Food Prices
Share of Energy Input in Production
(Elasticity)
(Percent, 2007)
Manufacture
Agriculture
World
Cotton
High income
Developing
Wheat
SSA
Rice
US
Canada
Maize
EU-12
China
Soybeans
Brazil
India
Palm oil
Turkey
0
3
6
9
12
15
18
0.0
0.1
Source: Author’s calculations based on the GTAP database (shares) and Baffes and Etienne (2014) (elasticities).
Notes: Elasticity estimates are based on an SUR reduced-form econometric model, 1960-2013 annual data.
0.2
0.3
27
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986
2. What are the causes?
Mostly supply driven; other long- and short-term factors
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility
4. What are the policy implications?
Subsidy and tax reforms; fiscal and monetary adjustments
5. What can the World Bank do?
Support policies
28
Oil Price Plunge:
Changing Supply and Demand Dynamics
Oil Intensity of GDP and Energy
Consumption
Oil Production
(mb/d, Equivalent for biofuel)
(Percent of energy Consumption)
(Index = 1 in 1954)
60
20
U.S. oil
Canada oil
Global biofuel (RHS)
15
1.2
50
1.0
40
10
0.8
30
5
20
0
Oil intensity of energy
consumption (LHS)
Oil intensity of GDP (RHS)
0.4
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
2014
2011
2008
2005
2002
1999
1996
1993
1990
10
0.6
Source: BP statistical review, World Bank, IEA.
Note: Right panel: Blue line is oil consumption in percent of global energy consumption. Red line is quantity of oil used per unit of global real GDP, indexed
to 1 in 1954.
29
Oil Price Plunge:
Stronger Supply and Weaker Demand
Monthly U.S Oil Supply
Monthly Global Oil Demand
(Million barrels per day)
(Million barrels per day)
13
95
2015
2015
12
94
93
2014
11
2013
92
2013
2014
10
91
9
Dot line: projection
Solid line: actual
90
8
89
Jan Apr Jul Oct Jan Apr Jul Oct Jan
Jan Apr Jul Oct Jan Apr Jul Oct Jan
Source: IEA.
Note: All oil supply/demand, including crude oil, biofuels and liquids. The last observations are for February 2015.
30
Supply Shocks: Dominant Driver
Supply and Demand Shocks
(Percent)
0
5
-10
0
-20
-5
-30
-10
-40
Supply (right
(RHS)axis)
Supply
-50
Demand (right
(RHS)axis)
Demand
-60
Actual (left
(LHS)
Actual
axis)
-15
-20
2 Feb 15
Jan 15
Dec 14
Nov 14
Oct 14
Sep 14
Aug 14
-25
Jul 14
-70
Source: Bloomberg, FRED, Haver Analytics, World Bank estimates.
Note: Based on estimates from the model, identifying the demand and supply shocks using sign restrictions. All shocks except the shock of interest are shut off by setting them to zeros and
the model is used to trace out the counterfactual oil price. This exercise is performed separately for supply and demand shocks. The red (blue) counterfactual shows how much oil prices
would have declined during the second half of 2014 only with the estimated supply (demand) shocks. Numbers shown are in cumulative percentages.
Dollar Appreciation: Coinciding with Price Drop
Crude Oil Price and US Dollar
(US$, 1973 = 100)
95
(US$/bbl)
120
90
100
Index against major currencies
85
80
Brent price (RHS)
Source: World Bank, Bloomberg, Federal Reserve Bank of Saint Louis.
Note: The last observation of Brent price is for Apr. 8 th, 2015, that of the index is for Apr. 3rd, 2015.
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
40
May-14
75
Mar-14
60
Jan-14
80
32
Changing Sources of Supply:
The New Oil Map
Oil sands
(Canada)
Conventional
(OPEC & non-OPEC)
Existing
Sources
Crude oil
Production
Biofuels
(Global)
Shale oil
(United States)
Unconventional
(mostly non-OPEC)
Shale oil reserves
(Russia, China, Argentina,
Libya)
New
Sources
Arctic exploration
(U.S., Russia, Canada,
Greenland, Norway)
Deep sea oil exploration
(Brazil, Mexico, West Africa)
Source: World Bank.
33
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986
2. What are the causes?
Mostly supply
3. What are the economic and financial consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility; regional spillovers
4. What are the policy implications?
Subsidy and tax reforms; fiscal and monetary adjustments
5. What can the World Bank do?
Support policies
34
Global Growth:
Net Positive Impact but Many Mitigating Factors
Positive impact on global growth (based on model simulations)
• 45 percent supply-driven decline could add 0.7 to 0.8 percent to global GDP
But mitigating factors (affecting the growth forecasts)
•
•
•
•
•
Crisis legacies and weak confidence
Monetary policy constraint
Changing relationship between oil and activity
Reduced investment in new oil exploration or development
Weak demand
13
Past Oil Price Drops Followed by Mixed
Performance
Global GDP Growth
(Year-on-year, in percent)
6
1986Q2
1991Q1
1998Q1
2001Q4
2008Q4
2014Q4
4
2
0
-2
-4
-6
-8
-6
-4
-2
0
Quarters
2
4
6
8
Source: World Bank.
Note: Global GDP growth computed on the basis of a weighted average (using 2010 USD GDP weights) of countries for which quarterly national account
data is available. Time “0” is the quarter of the trough in significant oil price decline episodes. “-8” corresponds to 8 quarters (2years) before that trough
and “8” correspond to 8 quarters after.
36
Oil Consumption Differs Across Economies
Consumption of Energy, 2013
(Percent of total energy consumption)
Oil
Natural gas
Coal
Hydro electric
Nuclear energy
Renewables
100
80
60
40
20
Sources: BP Statistical Review.
Note: Oil consumption is measured in million of tonnes; other fuels in million of tonnes of oil equivalent.
China
Russian Federation
South Africa
Turkey
India
Vietnam
France
Total World
Germany
United Kingdom
New Zealand
European Union
United States
Malaysia
Taiwan, China
South Korea
Australia
Philippines
Thailand
Indonesia
Japan
Brazil
Mexico
HK, SAR, China
Singapore
0
Emerging Economies:
Major Importers and Exporters of Commodities
China and India in Global Commodity
Imports
Selected Emerging Economies in
Global Commodity Exports
(Percent)
(Percent)
80
60
Chile
Malaysia
South Africa
Nigeria
Russian Federation
Indonesia
Brazil
50
China
60
India
40
40
30
20
20
10
Sources: World Development Indicators, UN Comtrade.
Note: Right Panel: average over 2008-13. Including exports of ores (e.g. bauxite) and oil products.
Soybean
Rice
Corn
Wheat
Bitumen
Coal
Oil
Gas
Soybean
Rice
Corn
Wheat
Bitumen
Coal
Oil
Gas
Nickel
Iron
Aluminium
Copper
Precious metal
Tin
Zinc
Nickel
Iron
Aluminium
Copper
Precious metal
Tin
Zinc
0
0
Global Inflation:
A Temporary Dip in 2015
Inflation Around Drops in Oil Prices
Global Inflation
(Year-on-year, percent)
(Year-on-year, percent)
7
1986Q2
1991Q1
1998Q1
2001Q4
2008Q4
6
5
4
5
80
Inflation (LHS)
Projection (LHS)
4
Oil price changes (RHS)
40
3
0
3
2
2
-40
1
1
0
-1
-8
-6
-4
-2
0
2
4
6
8
0
2010
-80
12
14
16
Source: World Bank.
Note: Left panel: Inflation in high income countries. Time “0” is the quarter of the trough in significant oil price decline episodes. “-8” corresponds to 8
quarters (2years) before that trough and “8” correspond to 8 quarters after. “Inflation” indicates a consumption weighted average of inflation rates of 16
members of the G20. “Inflation projection” is based on country specific VAR models for these 16 countries (including year-on-year growth in consumer
prices, producer prices, oil prices (in local currency), the nominal effective exchange rate and the deviation of industrial production from its HodrickPrescott-filtered trend)
39
Inflation: Diverging Trends
Inflation
Interest Rates: Hikes vs Cuts
(Median, percent, year-on-year, monthly)
8
Oil importers
40
(Number of policy rate changes)
Hikes
Oil exporters
Cuts
30
6
20
4
10
0
2014
2013
2012
2011
2010
2
Source: World Bank, Haver Analytics.
Note: Left panel: the last observation is for December 2014.
Oil Ex. Oil Im. Oil Ex. Oil Im. Oil Ex. Oil Im.
14-Q3
14-Q4
15-Q1
40
Links between Energy and Inflation:
Varies Across Countries
Weight of Energy in National CPI Baskets
(Percent)
20
18
16
14
12
10
8
6
4
2
Source: World bank, OECD, Morgan Stanley, IMF, Capital Economics.
Note: Compiled from OECD (for high-income countries, Hungary, Mexico and South Africa); Morgan Stanley (for China); IMF (for India,
Indonesia, Malaysia, Thailand and the Philippines); and Capital Economics (Brazil and Russia). Excludes transport.
China
Japan
United Kingdom
Philippines
France
Russia
Mexico
Canada
South Africa
United States
Thailand
New Zealand
Germany
Brazil
Malaysia
India
Indonesia
Hingary
Poland
0
Some Oil-Exporters under Financial
Pressure
Exchange Rate Against the U.S. Dollar
Stock Price Index
(Index = 100 in Oct 2014)
(Index = 100 in Oct 2014)
Colombia
Nigeria
Oct-14
80
Dec-14
India
Russia
Feb-15
Indonesia
Turkey
Apr-15
Oct-14
130
Malaysia
Kazakhstan
Dec-14
Mexico
Feb-15
Apr-15
120
100
120
110
100
90
140
80
70
160
60
180
50
Sources: Haver Analytics.
Note: Left panel: U.S. dollars per local currency unit, indexed to Oct 2014 as 100. The y-axis is reversed to show local currency’s depreciation. Last observation is
April 1st, 2015.
42
Right panel: last observation is April 13th, 2015.
Potentially Large Regional Spillovers
from Russia and Venezuela
Impact of 1ppt Decline in Russian
Growth
0
(Percent deviation from the baseline)
External Financing Provided by
Venezuela to Beneficiary Countries
(Percent of GDP, 2012)
8
7
-0.2
6
-0.4
5
4
-0.6
3
-0.8
2
Range
range
Mid-point
mid-point
1
0
-1.2
Baltics Kazakhstan Turkey Slovakia/ Belarus
Slovenia
GTM
HND
LCA
SUR
ECU
BRB
CRI
PAN
ARG
URY
BOL
PRY
SLV
VCT
DMA
DOM
KNA
ATG
JAM
BLZ
HTI
GRD
GUY
NIC 1/
-1
Country Average = 1.6
Sources: World Bank and IMF(2014).
Note: Developing CIS data is GDP-weighted average of World Bank client countries in Central Asia.
18
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986
2. What are the causes?
Mostly supply
3. What are the consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility
4. What are the main policy implications?
Fiscal and monetary adjustments; subsidy and tax reforms…
5. What can the World Bank do?
Support policies
44
Subsidy Reforms: A Timely Measure
Fiscal Break-Even Price, 2015
Fiscal Cost of Fossil Fuel Subsidies, 2013
(US$ per barrel)
(Percent of GDP)
25
200
Kuwait
Qatar
0
UAE
0
Iraq
5
Oman
40
Saudi Arabia
10
Bahrain
80
Algeria
15
Iran
120
Yemen
20
Libya
160
Oil importers
Iran
Libya
Venezuela
Algeria
Saudi Arabai
Ecuador
Iraq
Azerbaijan
Kazakhstan
Russia
Angola
Malaysia
Nigeria
Mexico
Egypt
Bolivia
Ukraine
Pakistan
Indonesia
Bangladesh
Argentina
India
Oil exporters
Source: IEA Fossil Fuel Subsidy Database, IMF.
Note: Countries where the fiscal cost of fossil fuel subsidies is below 1 percent of GDP are not shown. Fiscal break-even price is the oil price that balances the
budget.
45
Subsidy Benefits: More for Higher Income
Subsidy Benefits by Consumption Quintile: Comparison Across Regions
(Percent)
50
Bottom
2
3
4
Top
40
30
20
10
0
Africa
South and Central
America
Other Regions
Source: Arze del Granado, Coady, and Gillingham (2012), Vagliasindi (2012).
Note: Share of the total benefit from different fuel price subsidies for households across grouped by consumption levels.
All Regions
Plunge in Oil Prices: Four Questions
1. How does it compare with previous episodes?
A sharp drop; similarities with 1986; soft prices in 2015-17
2. What are the causes?
Mostly supply driven; other long- and short-term factors
3. What are the economic and financial consequences?
Net growth benefit but mitigating factors; lower inflation in 2015;
financial market volatility; regional spillovers
4. What are the main policy implications?
Fiscal and monetary adjustments; subsidy and tax reforms…
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Thanks!
Questions & Comments
M. Ayhan Kose
[email protected]