ESCAP: RISING OIL PRICES WILL ADD INFLATIONARY STRESS ON ECONOMIES

By P.Vijian

NEW DELHI, May 5 (Bernama) -- Major oil-importing nations in the
Asia-Pacific region together with Malaysia, the Philippines and Thailand, will
suffer severe inflationary stress on their economies, due to the spurt in global
oil prices, a United Nation's (UN) agency has warned.

The UN's Economic and Social Commission for Asia and the Pacific (ESCAP) in
its 2011 report released Thursday said rising energy and food prices will
impact Asia's economic dynamism and eventually push millions into poverty.

"Developing countries in the region are especially vulnerable to high oil
prices.

"They still rely heavily on energy-intensive industries and need to import
substantial amounts of oil and other energy commodities as essential inputs for
economic production," said ESCAP.

Brent crude prices crossed the $120 (RM360) a barrel mark on Wednesday, as
the global economy continued to witness a gradual recovery from the 2008
financial crisis.

ESCAP predicts that if the average oil price level reaches US$130 (RM390)
per barrel, growth in developing Asia-Pacific economies would dip by at least
0.47 percent.

Due to the escalating food and energy prices, the agency estimates 42
million people would be trapped in poverty in 2011, in addition to the 19
million already affected last year.