Mr Nouriel Roubini the economist who predicted the global financial crisis said that oil price spike caused by the political instability in some of the Middle East and North African countries could derail the fragile economic recovery in the world.

Mr Roubini said that the escalation in the political crisis in the region could result in oil prices going above USD 140 which could result in a double dip recession in some of the advanced economies. Peripheral Europe in particular and Eurozone, Japan and the US will be impacted severely.

He said that 15% to 20% increase in oil prices could stall the economic growth in US, Japan and Eurozone while emerging markets could witness further escalation in inflation and decline in growth as result of the surging input costs. Although oil supply has not been severely impacted by the political turmoil except the supply from Libya fear and prices surge expectations are likely to drive up the oil prices further.

(Sourced from gulfnews.com)