Asia is poised for another year of solid growth in 2011 even if the impact of the killer earthquake and tsunami on Japan remains unclear, Standard and Poor's said today.
'We expect the region to record another year of solid growth in 2011 after 2010 proved that Asia is emerging from the global financial crisis in a strong position, even as the economic picture for Japan following the recent earthquake remains less clear,' the rating agency said.
'But growth presents a unique set of challenges for policy makers, officials, and investors across the Asia-Pacific region,' it added.
Growth for the region, with the exception of Australia and New Zealand, is expected to moderate slightly from last year because of ongoing worries over the US and euro zone economies, Standard and Poor's said.
Inflationary pressure is a key concern for the region, which faces the prospect of tighter monetary policies as authorities seek to temper price rises, it said in its twice-yearly regional outlook.
'Rising prices stem in part from rapid growth and the easy credit conditions that the regions governments put in place to support their economies during the global financial crisis,' the credit ratings firm said.
'We expect the regions central banks to continue to tighten monetary policy this year.' That means central banks will raise interest rates to fight inflation. Standard and Poor's also said regional central banks may also consider further capital control measures and other actions to prevent risky assets bubbles.
Powerhouse China is projected to grow 9.1-9.6% in 2011, lower than last year's 10.3% and this is expected to impact the rest of the region, Standard and Poor's said.
Japan, which is struggling to cope with the devastation wrought by a magnitude 9.0 earthquake and tsunami on Friday, that triggered a crisis at a nuclear power station, is seen as growing 1.3-1.8%. The world's third largest economy expanded by 4% last year.
South Korea's economy is projected to grow 4.3-4.8% from 6.1% in 2010.
Within Southeast Asia, Singapore's growth is to moderate sharply to 4.5-5% from 14.5% last year, Malaysia is seen expanding by 4.8-5.3% and Indonesia to grow 5.9-6.4% from 6.1%. The Philippines is expected to grow by 5.1-5.6% this year from 7.3% and Thailand's economy will ease to 4-4.5% from 7.8%.
