Higher Oil Price Unlikely to Cause RecessionAPEC Economic Committee Chair Mitsuru Taniuchi said Saturday the rising oil prices is unlikely to cause a region-wide recession on APEC economies.The Committee, an APEC research body, is scheduled to release a report entitled "Impacts of Higher Oil Prices on APEC Economies," Taniuchi told a press briefing here. The official was cautiously optimistic on the potential adverse impacts of oil prices on the APEC region, saying the assessment of the impacts depends on a variety of uncertain factors, so that a closer watch on the future development of oil prices and economic conditions is warranted. Taniuchi said several key factors need to be taken into account in assessing the potential impacts of oil prices on APEC economies. Spelling out the factors, he said that the first is how long the higher oil prices will continue. "If the rise in oil prices is relatively short-lived as most oil experts foresee, the impacts on APEC economies would not be substantial," he said. The second is oil dependency of oil-importing economies, he said, adding APEC's developed member economies like the US and Japan have significantly reduced their oil dependency over the past few decades, indicating much smaller impacts on them than in the past. However, he said some developing member economies like Thailand and (South) Korea have increased their oil dependency, becoming more vulnerable to an oil price hike. The third is what matters is oil prices after adjusting for inflation. Although the recent oil prices are largely comparable to the record-high levels in 1979-80 and 1990, oil prices in real terms are still one third below their levels in 1990 and half their levels in 1979-80, he said. |
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