For a region that is a net oil importer, Asia would seem to be in the firing line of the rapid increase in oil prices. However, the region’s economies have proved surprisingly resilient. Low real interest rates; China’s strong growth, especially its ability to absorb higher input prices; and strong regional economic fundamentals have contributed to Asia’s ability to shrug off higher costs.
Analysts, however, are beginning to take account of the oil-price effect. “People seem to be dismissing the issue,” says Rob Subbaraman of Lehman Brothers in Tokyo.
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