growing developing economies and the aging of populations in industrial countries. "The risks that surround us today reflect this," he said. Growth in developing countries meant more demand for commodities, including oil, he cautioned. The IMF has warned that China's growing thirst for petroleum, tight supplies and limited production capacity will keep oil prices volatile through 2030, with the possibility of spikes as high as $100 a barrel. As living standards improve in China, India and other developing countries, global oil demand -- especially for cars and trucks -- will only increase, the lender said. Such demand should keep oil prices high and vulnerable to shocks, with significant upside risk over the long term, Rajan said, adding that oil sector investments have trailed demand. "Although we cannot rule out price spikes, we can also not rule out price plunges if volatile developing country growth slows," he said. According to IMF data, a permanent $5 increase in oil prices could lower global GDP by up to 0.3 percentage point. "In practice, the impact over the last year has been less than feared, partly because higher prices have been a consequence of strong global growth and partly reflecting the credibility of monetary policies," the IMF said.
