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Oil price may boost growth by 15-20%: World Bank

Katy Barnato
Karen Belier | AFP | Getty Images

Tumbling oil prices may increase world economic growth by 15-20 percent this year, but several countries will still lose out, the head of the World Bank told CNBC on Thursday.

"There are winners and losers in the oil price shift," Jim Yong Kim, the president of the World Bank, told CNBC from the World Economic Forum in Davos, Switzerland.

Following four years of stability at around $105 per barrel, oil prices have plummeted since June 2014. Brent and light crude oil prices remained below $50 per barrel on Thursday.

Kim said that historical estimates suggested that a 30 percent decline in oil prices-as projected for 2015-could be associated with an increase in the size of the global economy by around 0.5 percent.

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The World Bank forecast that the world economy would expand by 2.6 percent in 2014 before growing by 3.0 percent in 2015 and 3.3 percent in 2016. This expansion would be thanks to low oil prices, as well as continued recovery in the U.S., a gradual improvement in the euro area and receding domestic headwinds in slower-growing developing countries.

"Our projection is around 3 percent, so you could see a 15-20 percent increase in growth if those oil prices stay low," said Kim, who is co-chair of this year's World Economic Forum.

A sustained low oil price would also see income shift from oil-exporting countries to oil-importing countries, Kim said, with countries on several continents likely to lose out.

"We are really concerned about Venezuela, and when you talk about Venezuela, it is not just Venezuela, it is all the countries they have been supplying oil to at very low prices-Cuba, Haiti, Honduras," he said.

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Kim also singled out Africa's oil-exporting hub of Nigeria as a "loser".

"Nigeria has been working on the assumption of a very high price. We are already talking with them about how we can help them with social support programs," he told CNBC.

India was seen as a strong beneficiary of low oil prices, however, with its economic growth forecast to top 7 percent in the medium-term.

Kim added: "Will some of the marginal producers get out of the game? Will some of the Middle Eastern producer, Iran, Syria get back in the game? I do not think anyone knows."

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