Sky-rocketing Oil Prices Harm Asian Economies

Oil prices are of a 13-year high nowadays, and, according to analysts, Asian oil importing countries began worrying about growing unemployment and inflation, as their economies is subject to the impact of the price hike.

Oil prices now are around the level of $40.

"The countries that import a lot of oil, such as India, China, Japan, Korea and Taiwan, will be most negatively impacted," said Adrian Loh, a Singapore-based regional energy analyst with Merrill Lynch.

The higher prices could hurt Asia's economies just as many have started to recover from the economic fallout of the Iraq war and the outbreaks of SARS and bird flu.

As long as "prices remain in the US$30s, Asian economies will suffer," said David Thurtell, commodities strategist at Commonwealth Bank of Australia in Sydney.
Merrill Lynch recently upgraded its long term outlook for oil to US$28 a barrel.

For India, which imports about 70 percent of its oil, the price hikes are "a major cause for concern," said Anjan Roy, an economist with the Indian Federation of Chambers of Commerce and Industry, a grouping of private businesses.

For China, which follows India on the oil import higher oil prices may not be enough to slow down the country's juggernaut growth in the short term.