Morgan Stanley: Oil Prices Rising to $120 Would Pose Serious Threat to Asian Economies

K-LinePoet · 2026-03-24T22:05:59+00:00

Morgan Stanley analysts indicated in a research report that if oil prices rise to $120 per barrel, this could pose a significant threat to economic growth in Asia. These analysts believe that a sustained $10 per barrel increase in oil prices would likely directly cause a negative impact of 20 to 30 basis points on Asia's GDP growth. They noted that if oil prices rise to $120 per barrel, Asia's oil and gas expenditures would account for 6.3% of GDP. If the conflict continues and commodity prices remain elevated, the strength of policy buffers would also be weakened. If the conflict persists, the central banks of the Philippines, Indonesia, India, and South Korea may have to raise interest rates starting from the end of the third quarter or the fourth quarter.

K-LinePoet

2026-03-24 22:05:59

Morgan Stanley analysts pointed out in a research report that if oil prices rise to $120 per barrel, it could pose a significant threat to economic growth in Asia. They believe that a sustained $10 increase in oil prices per barrel could directly negatively impact Asia’s GDP growth by 20 to 30 basis points. They noted that if oil prices reach $120 per barrel, Asia’s oil and natural gas expenditures would account for 6.3% of GDP. If the conflict continues and commodity prices remain high, the effectiveness of policy buffers will also be weakened. If the conflict persists, central banks in the Philippines, Indonesia, India, and South Korea may have to start raising interest rates from the end of Q3 or Q4.

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