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Emerging Asia to stage divergent economic performance: Fitch

Xinhua, July 2, 2015 Adjust font size:

Asia will continue relatively high rates of growth over the medium term, while economic prospects remain starkly divergent across emerging markets, global rating agency Fitch said in its latest report.

"Differing exposures to key global macro trends -- including the fall in commodity prices and likely rise in U.S. interest rates, as well as country-specific factors -- will continue to contribute to substantial differentiation in growth rates in emerging markets over the next few years," Fitch said in its latest Global Economic Outlook report.

The rating agency forecast aggregate growth in emerging Asian markets, excluding China, to accelerate to 6.7 percent in 2016 from 6.4 percent in 2015, although robust Indian growth masks a weaker performance relative to the recent trends in other large regional economies such as Indonesia and Malaysia.

The region's performance is projected to be markedly stronger than in other big emerging markets, with Russia and Brazil forecasted to record substantial contractions in gross domestic product (GDP) in 2015 followed by a weak recovery in 2016 and 2017, noted the report.

China's economic growth rate was predicted by Fitch to slow to 6.8 percent in 2015 and 6.5 percent in 2016 as rebalancing in the nation continues.

India will be key in lifting the aggregate regional growth rate, accounting for almost half of the forecast growth for the region excluding China, said Fitch.

China's rebalancing is positive for economic stability in the long run. Monetary easing so far this year should contribute to a pick-up in growth in the second half of 2015, though activity data in May points more to stabilization rather than acceleration, it added. Endi