Directly out of the OPEC Monthly Oil Market Report

The mild boost to US growth from the current fiscal stimulus package may be short-lived as the housing sector recession drags on and labour markets weaken further, dampening consumer spending growth. Economic recovery is seen to take hold only in the second half of 2009. Overall, US growth next year at 1.6% is still well below potential. Euro-zone growth will show a more marked slowdown next year as tighter money and slowing export growth take their toll. Similarly growth in Japan is expected to remain lacklustre in 2009.

Emerging market economies remain resilient, but the need to tackle rising inflationary pressures, fed by escalating food and
commodity prices as well as strong domestic demand and credit growth, has led to tighter monetary policies. China’s economic growth is not expected to decelerate significantly until the latter part of 2008, but the rate of expansion may slow to 9.2% in 2009, 1.5% below the average for 2003-2007. Above-target inflation may lead to further monetary tightening after the Olympics, at a time when economic activity is expected to moderate.

There is some concern about India’s economic growth in
2009 as it faces not only the highest inflation levels in a decade despite several attempts at monetary tightening but also a worsening current account deficit due to an escalating import bill.
Latin America will also see a slowdown in growth in 2009 from the strong rates expected this year due to higher interest rates.