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Fall in oil prices will radically alter global imbalances

The collapse in oil prices looks set to wipe out the Gulf’s external surpluses next year, leaving China and the euro-zone as the world’s major surplus economies. At the same time, the US deficit looks set to narrow even further. While the distribution of global imbalances will be dramatically altered, their overall scale is unlikely to change very sharply and will remain much lower than before 2008.

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