KUALA LUMPUR: Economic activity in the Asia-Pacific region remained relatively strong, even as many emerging-market Asia (EM Asia) countries were severely hit by persistently sluggish world trade due to their relative openness. Fitch Ratings, in its “2017 Outlook: Emerging Asia Sovereigns”, report said some EM Asia countries were increasing infrastructure spending and/or were undertaking ambitious reform programmes to unlock domestic sources of growth.
“The median of Fitch’s real gross domestic product (GDP) growth forecast in 2017 for the 11 EM Asia countries we rated, is 5.5 per cent, substantially higher than in other regions (EM Middle East and Africa (3.5 per cent), EM Latin America (2.9 per cent) and EM Europe (2.8 per cent) ,” it said.
The 11 EM Asia countries are Bangladesh, China, India, Indonesia, Malaysia, Mongolia, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam.
Fitch said it expected governance and domestic political developments to remain a rating driver in a number of EM Asia countries, including Malaysia, Philippines and Thailand, while security issues were likely to remain in focus in Bangladesh and Pakistan.
Meanwhile, Fitch Ratings said the weighted average growth of EM Asia was expected to fall slightly to 6.4 per cent in 2017 and 5.9 per cent in 2018, from 6.5 per cent in 2016, due to the expectation of a gradual slowdown in China’s growth.
“This is well below the average of 7.8 per cent between 2010 and 2014, but is still high compared with its peers in other regions.
“Without China, which makes up 69 per cent of the region’s GDP, the weighted average is expected to rise to 6.3 per cent in 2017 and 6.4 per cent in 2018, from 5.9 per cent in 2016,” said Fitch Ratings.
Excluding India, responsible for 14 per cent of the region’s GDP, the weighted-growth forecast for 2017 is 5.2 per cent.
“We expect all countries in the region, except Mongolia, to exhibit higher GDP growth rates in 2017 than the medians of their respective rating categories,” it said.
The growth outlook is particularly strong in Bangladesh, India and the Philippines. — Bernama