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Morgan Stanley: Oil Price Rising to $120 Would Pose Severe Threat to Asian Economies

2 hours ago

March 23 — Morgan Stanley analysts warn a jump in oil prices to $120 a barrel could pose a significant threat to Asian economic growth. A $10 per barrel oil price hike is likely to cut Asia’s GDP growth by 20-30 basis points directly, the analysts note. If oil hits $120 a barrel, Asia’s spending on petroleum and natural gas will make up 6.3% of its GDP, they add. Should the conflict persist and commodity prices stay elevated, policy buffer strength will weaken, per the firm’s analysis. Central banks in the Philippines, Indonesia, India, and South Korea may need to hike interest rates by late Q3 or early Q4 if the conflict drags on.
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