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Thursday, December 22, 2011

Moody's Remains Upbeat On Asia's Prospects

26 Muharram 1433

KUALA LUMPUR, Dec 22, 2011- Moody's Analytics is upbeat on Asia's prospects as domestic risk levels in Asia's economies remain low and Europe is expected to muddle through with only a mild recession.

In a statement Thursday, its senior economist, Glenn Levine, said Asia-Pacific economies would grow solidly in 2012 as the region's fundamentals were sound, confidence remained firm and policymakers still had ample ammunition to support growth.

Levine said the China outlook would drive the regional outlook.

"China is the number one export destination for all regional countries except the Philippines, and is the reason Asia will continue to grow faster than the rest of the world," he said.

He said the recent Chinese data confirmed that the economy was slowing, but at a manageable rate.

However, a credit crunch linked to a property market collapse remained the biggest risk and would drag much of the region into recession, he said.

On another development, Levine said, Asia's small, export-led economies were vulnerable to a global slowdown.

"Taiwan, Singapore and Hong Kong are among the most trade-exposed and will tip back into recession if the global economy slows significantly in 2012," he said.

Levine said Australia, Indonesia and, to a lesser extent, Malaysia would be lifted by Chinese commodity demand linked to their huge public infrastructure and investment projects.

He said the biggest risks would come from outside the region.

"Europe's debt problems were already weighing on growth through weaker trade and investment flows, but the bigger risk is financial contagion and the potential to expose domestic weaknesses," he said.

 Source- BERNAMA

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