The prospects for economic growth in Asia have dimmed in recent months, says ratings agency Fitch, which has cut its forecasts for almost every country in the region.
Fitch says it now expects China to expand by 6.2 percent in 2019, down from its previous 6.3 percent estimate.
“We believe the direct impact of trade tensions on growth in China isn’t a big concern,” said Shaun Roache, S&P Global Ratings’ Asia-Pacific chief economist.
“However, U.S. policies impacting China’s technology supply chains could disrupt activity and undermine confidence over a longer horizon.”
For Asia-Pacific as a whole, growth is seen slipping to 5.3 percent from 5.4 percent, a 0.2 percentage point downward revision from the agency’s forecast at the end of the third quarter.
Fitch said India’s growth should remain steady at about 7.6 percent next fiscal year whereas previously it had expected a moderate pick-up. It has also trimmed our forecasts by 0.1-0.2 percentage point for Australia, Japan, and across ASEAN.
“We continue to see mainly downside risks to our Asia-Pacific growth forecasts,” Roache said. “Global trade and investment friction remain top of mind for Asia. If friction escalates, the key casualty would be manufacturing investment.”