Global credit rating agency Moody’s Investors Service Wednesday said the lower oil prices is expected to alleviate India’s high inflation and spur economic growth. Its research report “Global Macro Outlook 2015-16: Lower oil price fails to spur global growth” said India and the US stand out amongst some of the beneficiaries of lower oil prices.
“For India, high inflation has been one factor constraining growth in recent years, which the fall in oil prices will alleviate. This will provide tailwinds to already positive conditions,” Moody’s said. According to Moody’s lower oil prices, which is expected to be sustained would in principle provide a significant boost to global growth.
Lower oil prices will weigh on net oil exporters’ growth. Among some net oil importers, a number of factors will offset the windfall income gains from the lower oil price, Moody’s said. “There are some beneficiaries of lower oil prices; among the G20, the US and India stand out,” the report states.
Moody’s forecasts US GDP growth of 3.2 percent and 2.8 percent in 2015 and 2016 respectively, as the prevailing favourable economic environment will encourage consumers and companies to spend part of the gains in real incomes stemming from lower energy prices.