bloomberg | The global economy faces a new threat from an old enemy: oil.
A
spike in the price of crude foreshadowed economic slumps in each of the
last four decades and economists are worrying anew after Brent touched
its highest price in nine months above $113 a barrel amid fresh violence
in Iraq, OPEC’s second biggest producer. Brent started the year about $6 cheaper.
The
rule of thumb favored by many economists is that every $10 increase in
the price of a barrel of oil ends up cutting global growth by about 0.2
percentage point. That’s not an inconsequential amount for an already
lackluster expansion. The World Bank last week cut its outlook for 2014 global growth to 2.8 percent.
