labels: Standard & Poor's
Asian economies proving resilient to global turbulence news
30 April 2008

Despite recent turbulence in global financial markets, strong regional drivers will help insulate Asia from the adverse impact of a moderate US recession, says  Standard & Poor's Ratings Services, in a report Asian Resilience Amid Global Turbulence.

Dr Subir Gokarn, S&P's Asia-Pacific chief economist, said that while Asia-Pacific growth rates would slow somewhat, the region would still grow at a relatively fast pace in 2008 and 2009-buoyed by China and India.

"Two of the three largest economies, China and India, are also the fastest growing and, together, they will continue to grow at about 8 per cent (or above) over the next two years. This provides the region with enormous momentum," said Dr Gokarn.

Other important factors in the region's resilience include Japan's return to positive growth, and the ability of Asia-Pacific's economies to exploit growth opportunities through greater regional economic integration. Increasing integration is reflected in the overall thrust of trade policy in the region, which has seen a significant increase in intra-regional trade and broader agreements.  

Dr. Gokarn also cautioned that the region still faces key risks, including a prolonged U.S. economic slump, and hikes in food and fuel prices. "There are some visible threats to the region in the form of food and energy prices, which may adversely affect performance over the next couple of years," said Dr Gokarn.

"Managing these risks will be the most important challenge facing policymakers across the region as they try and sustain their own performance while moving towards greater integration," he added.


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Asian economies proving resilient to global turbulence