SINGAPORE (Standard & Poor's) Jan. 17, 2007—As expected China will lead
Asia-Pacific sovereigns in terms of economic growth in 2007, followed closely
by Kazakhstan and India. Although Japan remains the largest economy in the
region, it could be overtaken within a decade if China's phenomenal growth
continues. Key economic forecasts for the Asia-Pacific region were published
by Standard & Poor's Ratings Services today in a report titled "The Best And
The Rest: The Asia-Pacific Sovereign League".
"It is expected that growth dynamics in Asia Pacific will remain robust,
with a regional unweighted average growth rate of 5.3%, compared to 5.6% in
2006," said Standard & Poor's credit analyst Yee Farn Phua of the Sovereign
Ratings group. "This is still short of the 2000 record of 6.1%, although that
was an exceptional year in which many Asian economies recovered from the lows
of the Asian financial crisis."
"On the fiscal front, Singapore tops the regional rankings with a fiscal
surplus of 5% of GDP expected in 2007, followed by oil and gas exporter
Kazakhstan with an expected surplus of 3.2%," said Mr. Phua.
Japan remains the biggest net debtor regionally, accounting alone for
approximately 78% of the region's total gross debt stock.
Notably, 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.
In terms of external positions, around 60% of countries in Asia Pacific
run current account surpluses, reflecting the export-oriented nature of most
economies in the region. The remainder, in particular New Zealand and
Australia, continue to have persistently high current account deficits that
expose them to the risk of a sudden downturn in investor confidence or rapid
declines in their currencies.
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