The recovery in oil prices is a mixed blessing for global growth. We estimate that the contribution of energy costs to annual CPI inflation in the advanced economies will flip from an average of minus ½% now to as much as plus 1% early next year. However, oil prices in the range of $45-$60 could be ideal for overall economic activity. These levels would still be low enough to support consumer spending on other goods and services, while high enough to ease the financial pressures on the most vulnerable producers, including many in emerging markets.
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