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Finally, consider Asia’s external balances. If oil prices are being driven north by
global demand growth and rising trade flows, one would expect the earnings
of the oil exporting countries to be recycled through the system (in the form of
greater imports) more readily than when oil and other trade flows are being
constrained. The hit to oil-importing countries’ current account balances should
be much less than what the run-up in oil prices would suggest in isolation. That
too, is what we find in Asia today.
As a percentage of
GDP, Thailand is
Asia’s bigger
importer of oil
Since 2000, the run-up in oil prices has raised the oil deficit in most Asian countries
by 2-4 percentage points of GDP. Thailand’s deficit widened to 8% of GDP in
2007 from 4%, Taiwan’s widened to 5.3% of GDP from about 2%. Indonesia’s
balance swung from a surplus of 1% of GDP to a deficit of 2.2%. Only Singapore
managed to cut its oil deficit on this time frame.
Asia – net oil imports as % of GDP
% of GDP, excluding natural gas
8
6
4
2
7.9
7.4
5.9
5.3
5.1
4.1
2.5
2.2
1.5
2007
2000
0
-2
-1.4
-2.1
-4
TH KR PH TW HK IN CH ID SG VN MY
But Asia’s current account balances have not worsened on this time frame, even
excluding China, whose surplus ballooned to 11% of GDP in 2008 from 1% in
2001. On the contrary, they have risen substantially further into the black. For
the Asia 8 (excluding Malaysia because it is an oil exporter) current account
surpluses rose by an average of 3.2 percentage of GDP between 2001 and 2007 in
Asia ex-China – oil and current acct balance
% of GDP, ex-Malaysia (oil exporter)
9
8
7
6
5
4
3
2
1
net oil imports
current
account
surplus
00 01 02 03 04 05 06 07 08
Asean – oil balance and current acct balance
% of GDP, ex-Malaysia (oil exporter)
11
10
9
8
7
6
5
4
3
2
1
net oil imports
current
account
surplus
00 01 02 03 04 05 06 07 08
12