Falling oil prices will continue to benefit most oil importing countries, especially in Asia, said Baring Asset Management in a report on Thursday.
The downtrend is likely to continue during the first half of this year, though at a slower pace than before, according to the London-based company.
“All countries of the Asian emerging market, except Malaysia, are oil importing countries and thus beneficiaries of the low oil prices,” the report said.
“If only the oil prices remain in the lower level for a certain length of time, this will benefit most of the economic units in the market.”
Also, weak inflation is expected to allow emerging state governments to expand their interest rate policies.
The price of Brent crude oil, which has recently slipped below $50 per barrel, is likely to stabilize in the $40-$50 range in the second quarter, the company predicted.
“It should be in the second half of the year at the earliest for the oil price to show signs of rebound,” the report said, pointing out that the Organization of Petroleum Exporting Countries will hold its regular meeting in June.
“Until (the OPEC meeting and any possible changes), global investment on emerging markets will focus on Asia and its favorable conditions.”
The falling oil prices are also likely to improve the general economic situation of emerging countries.
According to Bank of America Merrill Lynch data, India will see a 0.8 percent rise in its balance of payments on current account for every 20 percent fall in the price of oil.
Such changes will help governments expand their fiscal policies and attract foreign investors who seek a sound market, the Barings report said.
