After slowing in the second half of last year, global growth is likely to gather pace again in the coming quarters. Admittedly, the drop in oil prices since last summer has prompted energy companies to cut investment, and has wreaked havoc in some countries (notably Russia). And the latest phase of the Greek crisis, combined with the mounting threat of deflation, has further clouded prospects for the euro-zone. However, the more recent rebound in oil prices has reduced these downside risks while cheaper oil has had two substantial positive effects. First, it has triggered a wave of interest rate cuts and other policy easing measures in response to falling inflation. And second, the drop in oil prices has provided a big boost to household consumption.
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