Global rating agency Standard and Poor's says that it expects India to become the third fastest growth economy during the current year in the Asia-Pacific region, with China in the lead in terms of economic growth in 2007, followed closely by Kazakhstan and India.

In its report, The best and the rest: The Asia-Pacific Sovereign League,S&P says that although Japan remains the largest economy in the region, it could be overtaken within a decade if China's current growth continues.

According to Yee Farn Phua, S&P credit analyst, sovereign ratings group, the growth dynamics in Asia Pacific are expected to remain robust, with a regional outweighed average growth rate of 5.3 per cent, compared to 5.6 per cent in 2006.

Though this is short of the 2000 record of 6.1 per cent, Yee says 2000 was an exceptional year, in which many Asian economies recovered from the lows of the Asian financial crisis.

Asian governments account for half of the top-10 globally ranked sovereigns with the highest contingent liabilities. This high concentration is due to the region's high levels of bank intermediation coupled with vulnerable asset quality, the report said.

In terms of external positions, around 60 per cent of countries in Asia Pacific run current account surpluses, reflecting the export-oriented nature of most economies in the region, it added.