Moody’s Investor Service announced on Friday that it has revised down the 2019-20 growth forecasts for 16 countries in the Asia Pacific due to weaker trade and investment.
The weaker outlook is offsetting the support from stable private and public consumption, the rating agency said.
Among the 16 Asia Pacific countries, Hong Kong and Singapore are set to have significantly weak growth this year, the agency said. GDP growth slowed sharply in both economies in the first half of the year versus the same period last year.
Hong Kong’s growth prospects are dampened by continuing anti-government protests and Singapore’s outlook is clouded by the trade tensions and the overall slowdown in the global economy.
The rating agency downgraded both Hong and Singapore’s growth forecasts for this year to 0.5 percent from 2.3 percent. Hong Kong’s growth outlook for next year was lowered to 1 percent from 2.7 percent and that of Singapore to 1.2 percent from 2.5 percent.
India’s growth forecast for this year was cut to 6.2 percent from 6.8 percent and the projection for next year was lowered to 6.7 percent from 7.3 percent.
Thailand’s growth outlook for this year was downgraded to 2.7 percent from 3.1 percent and the forecast for next year was cut to 3.1 percent from 3.5 percent.
While externally-oriented economies witnessed sharper slowdown in the first half of the year, domestic factors acted as a drag in Japan, India and the Philippines, Moody’s said.
A weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment, the agency said.
“In particular, softer capital formation has mirrored the weakening in exports, especially for trade-reliant economies such as Korea and Hong Kong,” Moody’s said.
In India, the moderation in business sentiment and slow flow of credit to corporates have contributed to weaker investment in the country, the credit rating firm noted.
The slower overall GDP growth in the region has not yet weighed significantly on broader employment conditions, while generally benign inflation supports purchasing power across Asia Pacific, Moody’s added.
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