If...an oil production peak has been hit, or is about to be hit, and assuming there is not, at present, a suitable replacement for decreasing oil production
and if...the US Dept of Energy is correct with their forecast of a worldwide 800k bbl/day oil shortfall by 4th q '05
then...the IMF is basically saying we're going to push the envelope real hard:
Economic Slowdown Is Leveling Off, Solid Growth Ahead, IMF Says
April 13 (Bloomberg) -- The slowdown in global economic growth has ``begun to bottom out'' and the world economy appears set for solid expansion in 2005 as the effect of high oil prices wanes in the U.S., the International Monetary Fund said.
World gross domestic product will rise 4.3 percent this year and 4.4 percent in 2006 as the expansion ``remains broadly on track,'' the IMF reported in its semi-annual World Economic Outlook, its most comprehensive look at world trends. The forecast for 2005 is the same as the one the IMF made in September and compares with growth of 5.1 percent in 2004.
Growth in the U.S., the largest economy, and in China, the world's fastest growing major economy, as well as in emerging market countries has been stronger than earlier forecast, while growth in Europe and Japan has been weak. Global growth in 2005 will be underpinned by favorable interest rates, improving corporate balance sheets, a gradual rise in employment and a strong economy in China, the IMF said in the report.
``A stronger cyclical rebound cannot be ruled out,'' the IMF's board said in an executive summary of the outlook.
The expansion may be endangered by its unbalanced nature, ``significant tightening'' of financial market conditions or further sharp increases in oil prices, the IMF said, even as its outlook projects a decline in oil prices in 2006.
``This year will be a good year for global growth but not a great year,'' said Nariman Behravesh, chief economist at Global Insight Inc., an independent economic research firm in Lexington, Massachusetts. ``The U.S. and China are still the engines of growth and the weak spots are the euro zone and Japan.''
Oil's Effect
After averaging about 6 percent in late 2003 and early 2004, global economic growth moderated, ``reflecting both a return to a more sustainable pace of expansion and the adverse impact of higher oil,'' the IMF said in its report today.
Average oil prices will begin to taper, rising 23.3 percent in 2005 before falling about 5.9 percent in 2006, the outlook said. Oil rose 30.7 percent in 2004. The IMF also reiterated its prediction from a report issued last week that said with excess capacity staying low, oil prices would remain volatile.
``Oil importers like the U.S., Japan, China and India are naturally harder hit,'' said Timothy Evans, a senior energy analyst at IFR Markets in New York. ``The overall impact of high oil prices has not been that devastating when it comes to overall GDP.''
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