Lower Oil Prices Unlikely to Revive Asia Demand: HSBC

New Delhi: A significant decline in crude oil prices is unlikely to result in a swift bounce in demand conditions in Asian economies including India, according to a report by global financial services major HSBC.

Tumbling crude prices are not going to be a "quick fix for Asia's growth malaise", HSBC said in its report.

Most Asian economies import crude oil and a lower purchase bill should, therefore, give a boost to the spending power of consumers, governments and companies, but "it ain't as easy as that", the HSBC Research report said.

According to HSBC, falling prices for raw materials, including oil, partly reflects cooling demand in Asia; secondly, there is an income shift under way and it is hurting Asia, at least in the short-term.

Moreover, crude importers such as advanced economies are preferring to save their savings rather than splurge, leaving the world short of demand, it noted.

The report said growth across the Asian region would be a "lot lower" if crude was still above $100 per barrel.

"If underlying growth is even weaker than currently reported, we might see activity sag further once the cushion from the fall in oil prices fades," HSBC co-head of Asia Economics Research Frederic Neumann said.

Lower crude oil prices should in principle be a boost to a region that for the most part imports oil, but that is not happening and growth has decelerated virtually everywhere alongside the decline in oil prices.

"Tumbling crude prices are not going to be a quick fix for Asia's growth malaise - rather, they are part of the symptom," Mr Neumann said, adding that a bounce in Asian demand thus appears unlikely on the account of oil.

"Looks like we'll be stuck in a slow grind for a while," Mr Neumann said.

Meanwhile, the Indian government recently lowered its economic growth forecast for 2015-16 to 7-7.5 per cent from 8.1-8.5 per cent.