Speaking to CNBC Africa, Nariman Behravesh, chief economist at IHS, said the recent fall in oil prices would stimulate global growth despite the fact that the revenues of oil producing economies are set to shrink.
“The good news for the global economy is that oil importing countries are huge and among them are the US, Japan, Eurozone and China. These economic zones are set to benefit from the drop in oil prices meaning global growth will be positive,” he said.
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“If you are an oil importer then the drop in oil prices is a very nice state of affairs, but if you are an oil exporter like Angola and Nigeria, then you are in trouble because the prices went down, which will affect government revenue.”
Turning to challenges in the Eurozone like Greece’s possible exit from the Euro block, Behravesh said, the exit would be met with appropriate action as the European Union has dealt with similar challenges before.
“The possibility of Greece leaving the Eurozone, even if the left wing party wins, is less than 20 per cent, but this possibility is worrying the economy,” he said.
“The most worrying of topics set to dominate WEF 2015 is China’s slowing growth, and questions will be around measures the Chinese government will incorporate so as to stimulate growth.”
China is set to grow at six per cent in 2015, which is less than the seven per cent growth that the government was aspiring towards.
However, fellow BRICS nation, India has been an exceptional case with the Narendra Modi-led administration being credited for changing perceptions.
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“Modi has brought some new perspectives on how India is viewed by both local and global investors,” Behravesh stated.
He also hailed the improved business performance in the US, adding that more was supposed to be done in emerging markets to complement that of the US and other developing nations.
“I don’t think the global economy can grow much without positive business activity in the US, however, it is important for global economy not to fire with one engine,” Behravesh cautioned.