“If this high level of (oil) prices maintain its way, it will have an impact on the (European) economy,” Amelia Torres, EU spokeswoman for economic and monetary affairs, warned at the first daily briefing of 2008 after the week-long Christmas and new year vacation. In New York, crude oil futures set a record close Wednesday, the first trading day of the year 2008, after briefly hitting the psychologically important mark of $100 a barrel on concerns of tight supply and a weak US dollar, which analysts fear may hurt the world economy. However, Torres declined to specify how the recent oil price move would affect the outlook of the European economy.
At a regular monthly meeting of EU finance ministers earlier December, EU Economic and Monetary Affairs Commissioner Joaquin Almunia suggested economic growth in the euro zone may slow more than forecast by the European Commission and drop below two percent in 2008 for the first time in three years, due to new developments in the oil markets and persistent financial turbulence. “We are facing downside risks for our growth scenario,” Almunia said at that time, „With the present information our forecast would have lower figures for growth.” In its annual autumn forecast released in November, the commission expected the economic growth in the euro zone to be 2.2% in 2008, which had already been revised down from 2.5% under a previous forecast.
Acknowledging Almunia’s remarks before Christmas were valid, Torres failed to say whether that means the soaring oil prices would bring down Europe’s economic growth further. Torres said the commission is scheduled to publish its new forecast in February, which will provide a clearer picture of impact of oil prices on European economy, adding the EU forecasts are usually based on average prices, futures prices as well as exchange rates assumptions in terms of the oil market. “So you have to be patient and wait until the next forecasting,” Torres said. (people.com.cn)
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