Goldman Sachs Warns of Emerging Asian Markets, Strait of Hormuz Blockade May Drive Inflation Higher

Odaily News Goldman Sachs analysts noted in a research report that a prolonged conflict in the Middle East could put pressure on emerging economies in Asia. Goldman Sachs estimates that if the Strait of Hormuz were closed for six weeks, oil prices could be pushed up to $85 per barrel. Under this scenario, inflation in the region could rise by approximately 0.7 percentage points, with the Philippines and Thailand showing the highest sensitivity. Supply disruptions could drag down the region's real GDP growth by an average of 0.5 percentage points, with Singapore being the most severely affected. Goldman Sachs added that the current account balances of almost all countries in the region could deteriorate, led by Thailand and Singapore. (Jin10)