Fitch: APAC growth to hold up amid China slowdown and US hikes

In its latest 2018 Outlook: Emerging Asia Sovereigns, the US-based Fitch ratings, highlighted, “economic growth in Asia-Pacific (APAC) is likely to remain strong in 2018, supported by improving global trade volumes, accommodative fiscal and monetary policies, and positive reform momentum in a number of emerging economies”.

Key Points:

“China's slowdown is likely to be modest, and create only limited headwinds for the rest of the region, while most central banks will have scope to keep domestic interest rates low in the face of tightening global monetary conditions.

APAC economies positioned at the front end of global supply chains - such as Korea and Taiwan - will continue to be key beneficiaries.

India and Indonesia are the economies that we expect to pick up most sharply, after a somewhat disappointing performance in 2017.

Japan's economy is also performing well and looks on track for its longest period of expansion since 2001.

Project Japan's GDP Growth Of 1.5% in 2017 And 1.3% In 2018.

China's growth should slow to 6.4% from 6.8%, as tighter credit conditions - part of efforts to contain financial risks amid rapid credit growth - continue to feed through the economy. 

The US monetary tightening, the gradual ending of monetary easing in Eurozone could put some pressure on asset prices, capital flows, currencies in APAC.

We expect APAC's major central banks to keep policy rates low in 2018, given the benign inflation environment. Only the Bank of Korea has so far raised its policy rate since the Fed began to tighten.“