The Federal Reserve understands that an increase in oil prices drags the economy more than it lifts inflation. The ECB seems of two minds. Under Trichet, the ECB did hike rates in mid-2008 as oil prices were racing higher and the euro zone economy was about to enter a contraction phase for which it is only now emerging. Now, there seems to be greater appreciation for core measures of inflation.
This Great Graphic was tweeted by David Keohane (of FT Alphaville), which comes from Credit Suisse. It depicts the impact on selected emerging market economies in Asia external account of a 10% increase in oil prices. This is essentially what has happened to Brent since early April.
Thailand is the most exposed and South Korea's current account has an almost one-for-one impact (10% rise in oil equates to a nearly 10% deterioration of the current account. Malaysia is notable in East Asia because it benefits from a rise in oil prices. Indonesia is also interesting because a rise in gas, which it exports, could blunt the impact of an increase in oil prices.
This Great Graphic was tweeted by David Keohane (of FT Alphaville), which comes from Credit Suisse. It depicts the impact on selected emerging market economies in Asia external account of a 10% increase in oil prices. This is essentially what has happened to Brent since early April.
Thailand is the most exposed and South Korea's current account has an almost one-for-one impact (10% rise in oil equates to a nearly 10% deterioration of the current account. Malaysia is notable in East Asia because it benefits from a rise in oil prices. Indonesia is also interesting because a rise in gas, which it exports, could blunt the impact of an increase in oil prices.
Great Graphic: Higher Oil Prices and Impact on Developing Asia
Reviewed by Marc Chandler
on
June 20, 2014
Rating:
Reviewed by Marc Chandler
on
June 20, 2014
Rating:
