Plunging oil prices a double-edged sword for Asia, say economists

Tokyo

A SLIGHT rebound in oil prices on Thursday helped calm frayed market nerves a little, following the price crash of benchmark crude to below US$50 a barrel this week.

Leading economists warned, however, that the full impact on Asian economies had yet to make itself felt, since slumping oil prices have potentially far-reaching implications for currencies, inflation rates, economic growth rates, government finances, corporate costs and profits. Asian governments thus need to use the gains from lower oil costs to carry out needed economic reforms while there is time, they said.