Warning that slowing emerging- market economies were hampering an oil recovery, the World Bank has slashed its forecast for crude oil prices for 2016 but said India's growth story remains strong and robust.
In its latest Commodity Markets Outlook released yesterday, the World Bank lowered the forecast of crude oil from USD 51 per barrel in its October projections to USD 37 per barrel.
Lowering of crude oil prices is seen as a good news for countries like India which are heavily dependent on import of oils to meet its energy needs is seen. This is also reflected in the latest World Bank report, which reiterates that India's growth story is strong and robust.
"A faster-than-expected slowdown in major emerging markets economies - especially if combined with financial stress - could further reduce commodity prices considerably, setting back growth in commodity exporters and the global economy," it said.
Of the five BRICS economies (Brazil, China, India, Russian Federation, and South Africa), four slowed or even contracted in 2015, it said.
China's economy continued to slow, and its re-balancing away from commodity intensive activities toward services has weighed on global trade and commodity prices, it added.
"In contrast to the other four BRICS, growth in India remained robust, buoyed by strong investor sentiment and the positive effect on real incomes of falling oil prices," the World Bank said.
India is the world's fourth largest crude oil consumer after the United States, China, and Japan, and imports most of the oil it consumes.
According to the report, during 2010-14, the four largest emerging markets (Brazil, Russia, India, and China) accounted for 20 per cent or more of global gas and oil production and 40 per cent or more of global coal and grain production.
At the same time, their commodity consumption has grown rapidly, to about 40 per cent of global primary energy and food commodity consumption and more than 50 per cent of global metal consumption.
"That said, there has been considerable heterogeneity among these countries, including between China and India, which together currently account for almost 40 per cent of the global population," the Bank said.
China has been world's largest consumer of a number of industrial commodities during the past decade and a half, and accounted for much of the growth of global commodity consumption-virtually all of the increase in metals and more than half of the increase in primary energy between 2000 and 2014.
China also accounts for more than half of global coal consumption, most of it domestically produced.
"India's industrial commodity consumption has also increased, but to a lesser extent than China's, partly as a result of its economic growth being more services based than China's," the report said.
