Global real gross domestic product grew by about 5 per cent in 2004 and is projected to increase by 4½ per cent in 2005. Growth in some of the developed economies slowed in the second quarter of 2005 while emerging-market economies continued to record robust growth.
However, to date the impact on global growth of higher oil prices has been moderate, reflecting in part the fact that higher oil prices have been largely the result of strong global demand. Even though core inflation rates have remained benign, overall inflation rates in most countries have already increased somewhat in response to the sharp rise in oil prices.