ISTANBUL, Turkey, Feb. 10 (UPI) -- Low oil prices may have an aggregate negative impact on the health of the global economy, Russian Finance Minister Anton Siluanov said Tuesday.
Siluanov told reporters from the sidelines of the summit for the Group of 20 major economies in Istanbul the impact of low oil prices, for importers and exporters alike, would be negative.
"The cumulative effect from the current steep fall of prices for resources may enfeeble the aggregate demand in world economy and this in turn will slow down its growth rates," he said.
A blog posted last week by economists at the International Monetary Fund found low oil prices will boost economic growth short-term, as consumers save on energy costs, but mid-term risks are present in terms of national monetary policy planning.
Exporters will lose and importers will win in the low oil price era, though the economists said the greatest threat in the current market is low inflation, not necessarily financial instability.
Eurostat, the statistics office for the European Union, reported inflation for January was at minus 0.6 percent, a further contraction from the minus 0.2 percent reported in December. Deflation is driven in large part by the slump in oil prices, off about half of their June value.
Russia's economy is under dual strains from low oil prices and sanctions imposed by its Western rivals in response to crises in Ukraine. Russia's currency is trading at historic lows against the U.S. dollar and its economy is expected to experience negative growth moving forward.
The International Energy Agency said Tuesday the overall impact on Russia's economy will be "significant."
Oil prices are trending upward in 2015, up more than 15 percent from the end of January. The Organization of Petroleum Exporting Countries said in its monthly oil market report for February traders were "bullish" about oil prices. Overall demand for oil is expected to rise, OPEC added.
"We raised the problem [at the G20 meeting] and we believe a deeper analysis of the impact of falling oil prices on various countries is needed," Russia's finance minister said.
