Oil spike could result in double dip for some nations
Escalation in the political crisis in the region could result in oil prices going above $140, says economist who predicted the global financial crisis
Dubai: Oil price spike caused by the political instability in some of the Middle East and North African countries could derail the fragile economic recovery in the world, said Nouriel Roubini, the economist who predicted the global financial crisis.
Speaking at the Middle East Investment Summit 2011 in Dubai on Tuesday, Roubini said the escalation in the political crisis in the region could result in oil prices going above $140 which could result in a double dip recession in some of the advanced economies.
He said peripheral Europe in particular and Eurozone, Japan and the US will be impacted severely.
"A 15 to 20 per cent increase in oil prices could stall the economic growth in US, Japan and Eurozone while emerging markets could witness further escalation in inflation and decline in growth as result of the surging input costs.
Although oil supply has not been severely impacted by the political turmoil except the supply from Libya, Roubini said fear and prices surge expectations are likely to drive up the oil prices further.
