The decrease in crude oil prices since mid-2014 will benefit most sovereigns in Asia-Pacific, according to Moody's Investors Service in a statement.

Moody's senior vice-president for Asia Pacific and the Middle East Thomas Byrne said, “As long as oil prices remain low, the direct effects will be positive on trade balances and downward on inflation in most Asian countries.

“Lower inflation and import costs, in turn, will likely support growth by raising consumer purchasing power, lowering investment input costs and increasing monetary policy flexibility.”

However, growth acceleration may be checked by lower global growth and international financial uncertainty in 2015, Moody's senior vice-president Atsi Sheth said during a briefing on the credit implications of lower oil prices on Asia-Pacific sovereigns.

Moody's has reduced its average price assumptions for Brent crude oil to US$55 per barrel through 2015 and US$65 per barrel in 2016.

Moody's notes that in Malaysia (A3 positive rating), Indonesia (Baa3 stable) and India (Baa3 stable), lower oil prices have led to fuel subsidy reforms, which support their sovereign credit profiles. However in the case of Indonesia and Malaysia, lower hydrocarbon-related government revenues will erode the impact of these gains on their budget balance.

Crude prices more than halved between June last year and January this year, owing to higher oil production in the US and lower demand in emerging markets. While Moody’s expects oil prices to eventually rebound as demand increases and low prices to create an eventual supply response as producers reduce capital spending, this supply response will not be meaningful until at least 2016, it said in the statement.