Summary : A picture illustration shows oil being poured on a palm at an oil field operated by a subsidiary of the KazMunayGas Exploration Production JSC in Kyzylorda region, southern Kazakhstan, January 22, 2016. A permanent surge in oil prices will reduce the euro zone’s potential output by less than 1% over four years, a small hit that could be further reduced by the green transition, the European Central Bank said on Monday.
Assuming a 40% rise in oil prices in the next four years compared to 2017-20, the ECB concluded that potential output in the euro area would be cut by just 0.8% over that period.
“This constitutes a somewhat limited shock, which should be seen in the context of the cumulative increase in potential output, estimated by the European Commission to hover at around 5.2% for the next four years,” economists Julien Le Roux, Bela Szörfi and Marco Weißler wrote in an article.
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