Japan, China, Hong Kong and to some extent Singapore are fighting deflation, so rising oil prices can be something of a boon. Inflation figures would not show large upward swings unless oil prices really shoot up and stay there. But Barker worries about the Philippines. Prolonged high oil prices is going to be a negative. Thailand may also face difficulties because the baht is also weakening against the U.S. dollar.
All bets are off if the U.S. economy slows drastically.
Although crude prices have more than doubled since February, retail gasoline prices in America are up just a third, suggesting that there is room for further increases. If the economy then grinds down, American purchases of Asian goods and services may slow too, which will be bad for the region's recovery. A lot of ifs, but economically fragile Asia needs to be aware of the darkest scenarios. All Rights Reserved. Terms under which this service is provided to you.