MF: High Oil Prices Are Worsening Global Trade Imbalances

Rising oil prices have magnified global trade imbalances, making the world economy more vulnerable to financial turmoil and higher inflation, the International Monetary Fund said Thursday.

In a portion of its latest World Economic Outlook published Thursday, the IMF again tries to understand the puzzle of how the U.S. continues to finance massive and growing trade deficits that for years economists have said are unsustainable. IMF economists look at the contribution oil imports have made to the U.S. trade deficit, and the impact on U.S. interest rates from so-called recycling of petrodollars. In another study, they examine the causes and sustainability of historically high levels of corporate savings in industrial countries.
Schlumberger