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World: Gasoline Price Surge will Tax Growth

ByThe National Bank of Canada
Published 02/28/2012, 06:16 AM
Updated 05/14/2017, 06:45 AM
CL
-1.67%

Energy price inflation is complicating the outlook for global growth. Our forecast calling for 3.5% global GDP growth in 2012 was based on crude oil averaging around $90/barrel for the WTI. While it remains to be seen how much longer the tension in the middle-east will endure, the current price of gasoline is beyond our comfort zone. As today’s Hot Chart shows, the price of gasoline in the U.S. has increased significantly, with the price at the pump $3.69/gallon last week. We estimate the 13% rise in gasoline prices since the start of the year to be akin to a loss of purchasing power in excess of $40 billion at an annualized rate. As shown, the situation is certainly not better in the eurozone where the price of Brent expressed in euros surged to an all-time record high in February.

World Gasoline Price Surge will Tax Growth

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