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Fitch may cut Asian growth forecasts

Fitch Ratings Inc may lower its growth forecasts for some Asian countries in the face of a possible slowdown in the US economy, a top executive at the rating agency said yesterday.

The agency has no plans, however, to review the credit worthiness of Asian countries despite the recent jitters in the global credit market, said James McCormack, head of Asia-Pacific sovereign ratings at Fitch.

"The Asia-Pacific region as a whole is a net creditor," McCormack told reporters in Mumbai.

McCormack said Fitch was currently reworking growth estimates for the US economy following the crisis in the subprime mortgage market.

"Once we complete that process, we could scale back some growth estimates for the Asian region. including India," he said, without naming other countries.

McCormack said strong capital inflows into Asian economies have expanded money supply and kept interest rates low, thus sustaining a high growth momentum in recent years.

"We are going to see a slight reversal of the process. So you will see a tightening of market interest rates," he said.

Fitch currently forecasts Asian economies, excluding Japan, to grow 8.5 percent this year, largely on the back of robust growth in China and India. It estimates that the Chinese economy would grow 10.4 percent this year, while India's would expand 9 percent.
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