Oil price surge likely to hurt Asia’s growth

Singapore, May 15:

A sharp rise in oil prices poses a threat to Asia’s economic growth, an Asian Development Bank (ADB) senior economist said in a report published on Monday.

“Although high oil prices have so far had only a moderate impact on Asian economies, a further rise in prices could tighten constraints on growth,” The Business Times quoted Cyn-Young Park as saying.

ADB estimates suggest a further $10 increase in the price above current levels of around $70 a barrel would cut Asia’s growth by 0.2 per cent in a full year, reduce the aggregate trade balance of the region by 0.5 per cent and raise consumer prices by 0.5 per cent.

If Asian central banks tighten policy to anticipate the inflation that energy costs are signalling, impact of the latest oil shock could be worse, the bank warned.

In Thailand, Taiwan, Malaysia, tthe Philippines and Singapore, growth slowed by more than one per centage point last year.