G8 leaders increased concern over oil prices

According to the leaders of the G8 nations, the world economy is facing turbulent times and they expressed their concern over commodity prices, namely oil and food as they are currently stalling worldwide growth.

Although they have remained positive about long term and future economic growth, the current situation is being seen as problematic as growth is being moderated as the MSCI World Index of stocks fell again yesterday to the lowest in two years, due to the threat of global inflation slowing economic growth.

As oil prices have doubled over the last year, currently a barrel stands at a whopping $141.73 and so as a short term measure have called for oil-producing countries to ensure transparent and stable environments, in order to increase investment and expand production capacity.

Although the G8 leaders made no particular reference to the dollar, President George W. Bush did however stipulate that a strong US dollar is in the best interest of the world economy. However, the dollar has fallen 12 percent against the yen and 15 percent versus the euro since the last G8 summit.

Inflation seems to be the largest threat that the G8 leaders have identified and the Bank for International Settlements recommended last month that the world’s central banks raise interest rates.

The G8 nations include the US, Japan, Germany, France, Great Britain, Italy, Canada and Russia.

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