Slower global economic growth over the next 12 months or so will likely reduce oil usage. Record high inflation and the rise in the cost of living have depressed consumer confidence, limiting their ability and willingness to spend. In some of the poorest countries, it has also resulted in concerns around food security. Many countries are also taking a more aggressive approach to monetary policy normalisation. Interest rates are rising faster than previously expected. Major central
75 is the new 25 – Policy interest rate hikes in selected countries Table 6.1 banks are increasing policy interest rates by as much as 75 bps at a time (Table 1). Some economies are expected to take more strain than others. Forecasters have become increasingly downbeat on European and UK growth projections as the war in Ukraine drags on.
Aug
Jun
Jul
Sep
75 bps
-
75 bps
75 bps
US
EZ
-
-
50 bps
75 bps
UK
25 bps
50 bps
-
-
In addition, China’s devotion to its zero-Covid policy has dragged on their economy (Figure 6.3). Easing Chinese restrictions were expected to support the global economy, but we’ve seen that they can be reimplemented at any moment. This places downside risks on a widely expected Chinese growth recovery that will support global growth and the demand for oil.
China’s real GDP growth – Real GDP growth in Chain below expectations at the start of 2022
18
13
8
4,80
3
0,40
-2
-7
19q1
19q3
20q1
20q3
21q1
21q3
22q1
Source: BER, 2022
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