TOKYO, July 4, 2008 (AFP) – Asia’s emerging economies are “highly vulnerable” to skyrocketing oil prices, making inflation the number one concern for policymakers, the head of the Asian Development Bank said Friday. But emerging Asia looks set to avoid a sharp slowdown given strong economic growth in China and should easily avoid a repeat of the financial crisis that rocked the region a decade ago, said ADB president Haruhiko Kuroda.
“Emerging Asian economies are highly vulnerable to surging oil prices, given their high dependence on oil imports and low energy efficiency,” he told a press conference at the Foreign Correspondents’ Club of Japan.
“With the global economy slowing and oil subsidies being phased out, high oil prices could have a more visible impact on domestic consumption and growth in the region this year and in 2009,” he warned.
Oil prices have soared five-fold since 2003 amid rising demand in emerging economies such as China and India and fears of supply shortages. World oil prices shot above 146 dollars a barrel Thursday for the first time ever.
Central banks in emerging Asia face a dilemma about how to contain inflation through higher borrowing costs while avoiding snuffing out ec