Oil’s Decline a ‘gift’ for Asia Economies

Plummeting oil prices, which on Monday saw Brent crude tumbling to its lowest level in four years, may be bad for producers but should come as a welcome relief for Asia economies, boosting economic activity and reducing inflationary pressures, economists say.

“This is a tax cut for most of Asia [as] this is an energy short region,” Paul Gruenwald, chief economist, Asia Pacific at Standard and Poor’s (S&P) Ratings Services.  “A couple of producers in the region – Malaysia and Australia – may take a minor hit but for the rest of the region, this is a gift,” he said.

The majority of countries in Asia are energy importers, with net import bills ranging under 2 percent of gross domestic product (GDP) for Vietnam to more than 10 percent for Thailand, according to Fitch Ratings.

CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.