Morgan Stanley Warns of Economic Impact on Asia if Oil Prices Reach $120 per Barrel

Morgan Stanley analysts have highlighted potential economic challenges for Asia if oil prices rise to $120 per barrel. According to Jin10, the analysts noted in a research report that a sustained $10 increase in oil prices per barrel could negatively impact Asia's GDP growth by 20 to 30 basis points. They emphasized that if oil prices reach $120 per barrel, spending on oil and gas in Asia could account for 6.3% of GDP. The report also warned that if conflicts persist and commodity prices remain high, the effectiveness of policy buffers could be weakened. In such a scenario, central banks in the Philippines, Indonesia, India, and South Korea might need to raise interest rates by the end of the third or fourth quarter.