Fitch research institute: Oil price shocks may drag down most developed economies

According to Golden Ten Data on March 9, analysts from BMI, a research institution under Fitch, stated in a report that since most developed economies are net oil importers, oil price shocks may have a widespread drag effect, leading to a decline in real income and subsequently suppressing consumption and investment. They noted that energy-importing countries with current account deficits, such as Italy and Greece, are the most vulnerable. Importing countries with current account surpluses, such as Germany, South Korea, and Japan, also face risks. In contrast, exporting countries with current account surpluses, such as Norway, will benefit from rising energy prices, while Sweden and Ireland have greater fiscal and monetary space to absorb the shock. BMI added that although Canada and Australia have balanced energy accounts but current account deficits, they may still benefit as increased energy export revenues are expected to improve their external balances.