From VOA Learning English, this is the Economics Report.
Today we tell you more about the effects of falling oil prices. Lower demand for oil and too much supply have sent prices to their lowest levels in five years. Recently, the Organization of Petroleum Exporting Countries decided to keep oil production at current levels.
Lower oil prices are causing economic hardship in some oil producing nations. Officials in those countries are exploring ways to cut government spending.
The president of Venezuela said that he and other government officials should take pay cuts as part of budget reductions. The Reuters news service says the reductions are meant to answer lost oil income. Reuters says 96 percent of Venezuela’s export earnings come from oil sales.
The nation also has among the highest inflation rates in Latin America. Russia, another big oil exporter, is also facing problems. The nation’s economic development ministry recently predicted that the Russian economy will shrink by eight- tenths of a percent in 2015. Russian money has lost about 40 percent of its value this year compared to the American dollar.
Observers have blamed the drop partly on falling profits from oil exports. Economists also say lower oil prices are helping economies in Asia.
In a recent report, Fitch Ratings said China and most major Asian economies would effectively earn more money from continued lower oil prices. Thailand spends 15 percent of its national income on oil. Thailand, Malaysia and Indonesia all are moving to reduce oil price supports, which are often a major part of government spending.