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IEA: Emerging economies could prevent double-dip
No sign of double dip recession in big emerging economies; Energy demand in China, Mideast, India robust; ‘They may save the rest of the world.’
October 13, 2010 2:02 by Reuters
Robust growth in the world’s emerging economies, particularly China, may be sufficient to save the rest of the world from a double-dip recession, a senior economist said on Tuesday.
Fatih Birol, chief economist of the International Energy Agency (IEA), which advises 28 developed economies on energy policy, said he expects booming growth in emerging markets, where energy demand is robust, to more than offset flatter growth in other regions.
“When I look at developing nations and their energy consumption, such as China, the Middle East and Russia, which can be seen as leading indicators, they do not signal a double dip,” Birol told Reuters in an interview.
“They may save the rest of the world.”
Energy demand growth was being led by China, which the IEA has said is now the world’s biggest energy consumer after overtaking the United States.
“We see growth especially in developing markets, almost fully driven by China, Middle Eastern countries and India.”
“It’s China, China, China and India. I think it is fair to put the Middle East between China, China, China and India in terms of the magnitude of demand,” he said during a speech earlier on Tuesday.
Birol said that even if oil prices dropped, demand in emerging markets was likely to grow strongly because of subsidies.
A large portion of the growth in these countries will come from the transport sector where only a minority of citizens own vehicles, he added.
In addition to global economic recovery, a weak U.S. dollar could be a supportive factor for oil, he said.
(Reporting by Humeyra Pamuk and Emma Farge; writing by Christopher Johnson; editing by Keiron Henderson)