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.
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