IMF Warns Oil Shock Could Hit Asia Growth

The latest economic outlook released during the spring meetings highlights significant challenges for emerging economies in Asia due to their heavy reliance on oil and natural gas. Growth forecasts for emerging Asia have been revised to 4.9 percent for this year and 4.8 percent for the next. The region's high energy intensity and dependence on energy imports make it highly vulnerable to disruptions in the Strait of Hormuz. According to the World Economic Outlook, while the reference scenario assumes temporary energy shocks, adverse and severe scenarios project higher oil prices for a prolonged period. If these severe conditions persist into 2027, the region could experience a cumulative growth reduction of one to two percentage points. Furthermore, the Asia-Pacific region's energy intensity stands at about four percent of GDP, which is double that of the European Union. Countries like the Philippines and Thailand face even higher energy intensities of up to ten percent of GDP, underscoring the critical economic risks posed by sustained energy import dependency.