Impact of Oil Prices on Country’s Economy: A Case Study South Asian Countries
10 Pages Posted: 16 Sep 2012
Date Written: July 16, 2012
The study is based on the four large South Asian oil importing countries namely India, Pakistan, Sri Lanka and Bangladesh. The impact of fluctuating oil prices is studied over the economy particularly on Inflation, GDP, FDI and exchange rates using regression analysis. The results of the study indicated that the increasing oil prices resultantly increase the inflation and puts pressure on local currency exchange rate against US$. On the other hand, the GDP and FDI are seen to be increasing with increasing oil prices primarily due to the rapid industrialization and promising returns on investment in the region.
Keywords: oil prices, GDP, FDI, inflation, exchange rate, South Asia
JEL Classification: E30, F31, N10
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