Washington: The fast growth of emerging economies has led to a rise in global oil demand and that of other commodities too, US Federal Reserve Board Chairman Ben Bernanke said on Wednesday. (Agencies)
At his first-ever press conference, US Federal Reserve Board Chairman Ben Bernanke attributed the recent developments in the Middle East to the significant increase in gas prices in the United States, but also to the increasing demand for oil from emerging markets.
"On the one hand, we have a rapidly growing global economy. Emerging market economies are growing very quickly. And their demand for commodities, including oil, is very, very strong," he said.
Indeed, essentially all of the increase in the demand for oil in the last couple of years, in the last decade, has come from emerging market economies, Bernanke noted.
"In the United States, our demand for oil, our imports have actually been going down over time. So the demand is coming from a growing economy, where we've seen about a 25 per cent increase in emerging market output... since before the crisis," he said.
"And on the supply side, as everybody knows who watches television, we're seeing disruptions in the Middle East, North Africa, in Libya and in other places, that have constrained supply; that supply has not been made up; and that, in turn, has driven gas prices up quite significantly," Bernanke said.
"So again, this is a very adverse development. It accounts, in the short run, for the increase in pretty much almost all of the increase in our inflation forecast, at least in the very near term. There's not much that the Federal Reserve can do about gas prices per se, at least not without derailing growth entirely, which is certainly not the right way to go," the Fed Chairman said.
"After all, the Fed can't create more oil. We don't control the growth rates of emerging market economies. What we can do is basically try to keep higher gas prices from passing into other prices and wages throughout the economy and creating a broader inflation, which would be much more difficult to extinguish," Bernanke said.
Washington: The fast growth of emerging economies has led to a rise in global oil demand and that of other commodities too, US Federal Reserve Board Chairman Ben Bernanke said on Wednesday.