Economics
Plunging Oil Price Is Far From the Economic Balm It Used to Be
- Cheaper energy boosts household income but investment may sag
- High-yield debt issued by energy companies spikes above 10%
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The idea that cheap oil can help the global economy in its time of need isn’t clear-cut right now.
It means lower fuel costs for households and business, but that’s not guaranteed as global expansion slows and the savage drop in the price of oil can also filter out in less positive ways. Morgan Stanley economists note it will hit the investment outlook in the energy sector, adding another drag on growth amid hits to multiple industries and countries from the coronavirus.