Soaring oil prices bigger threat to Asia than China slowdown =

Soaring oil prices bigger threat to Asia than China slowdown =

Deutsche-Presse Agentur
Singapore

Soaring oil prices pose a bigger threat to Asia than a
slowdown in China, potentially upsetting the current economy
recovery, a Citigroup report said on Wednesday.

There is little sign that China's fast growth will come to a
screeching halt, but an oil price shock which persists could
prove worrying for many of the region's economies, the report
warned.

The Asia Economic Outlook underscored the view that growth is
moderately very slowly in China, but the hike in oil price fanned
partly by China's rising demand could be another story.

"No country in Asia would see a surge in growth from higher
oil prices, with the possible exception of Vietnam," the report
said.

Thailand, the Philippines, Malaysia and Indonesia would see
growth drop by about 0.6-0.8 percentage points by the fourth
quarter and through the first half of next year, "sizeable but
manageable effects", Citigroup said.

Inflation effects would likely be in the order of 1 percent
for the hardest hit economies, it added.

Oil prices leapt to a record US$42 a barrel in New York on
Monday in the wake of Saturday's terrorist attack in Saudi
Arabia, the highest in 21 years of crude trading on the New York
Mercantile Exchange.

The report does not believe high oil prices will last because
Saudi Arabia and the rest of the OPEC oil products are likely to
expand supply.