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Fitch cuts Asian growth forecast for 2012
Ratings agency Fitch has cut its 2012 growth forecast for emerging Asia from 7.4 per cent in June to 6.8 per cent.
Fitch said the cut reflects both the deterioration in the outlook for the world economy and the lagged impact of policy tightening in some countries, including the region’s two giants, China and India.
It added however, that emerging Asia’s growth prospects remain relatively “favourable”.
The agency also gave its views on sovereign credit trends in the region.
It said: “Emerging Asia’s sovereign credit-worthiness is supported by strong or improving public and external finances, as well as relatively strong medium-term growth prospects for most countries.”
These factors supported the assignment of a Positive Outlook to Korea’s A+ rating on November 7 2011, and Indonesia’s upgrade to BBB- on December 15 2011.
Fitch believes that “high-income Asia” exhibits more mixed credit trends. Australia joined Singapore among the ranks of AAA sovereigns on November 28 2011, while long-standing concerns over external indebtedness saw New Zealand downgraded to AA stable from AA+ negative on September 29 2011.
Hong Kong was affirmed AA+ stable, while Japan’s AA Foreign-Currency and AA- Local-Currency IDRs remain on Negative Outlook on Fitch’s concerns over medium-term government debt dynamics.
