Asia-Pacific Region To Weather US Economic Slowdown
The Asia-Pacific region should be able to weather the impact of a significant slowdown in the US economy in 2008, according to a new report from Standard & Poors. Although there is a wide range of growth rates prevalent across the Asia-Pacific, and countries are at different stages in their interest-rate cycles, the common characteristic of the region can best be described as steadiness, S &P says.
The growth outlooks for the region over 2007 and 2008, broadly speaking, do not suggest any dramatic changes from 2006.
Given the relatively high dependence of Asian economies on exports—particularly exports to the U.S.–slower growth in such an important market may reasonably be expected to adversely impact on the region’s performance. However, as important as the US market is, economies in the Asia-Pacific region are beginning to leverage more effectively on their neighbors’ collective performance, S&P says.
Two of the fastest growing economies in the world, China and India, are located in the region and both have significant momentum coming from domestic demand, which makes their performance less dependent on external forces, S&P says. Further, the slowdown in the US economy is itself largely driven by the housing sector, which, relatively speaking, is among the least import-intensive of major sectors.
Given these factors, our assessment is that a US slowdown will not have a significant impact on the region’s growth performance.
Steady As We Go: The Asia-Pacific Weathers Global Turbulence is available for purchase.
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