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China, India engines of growth: S&P

China and India will be the biggest “engines of growth” to help the Asia-Pacific region navigate the global storm next year, Standard & Poor’s said yesterday.

In its Asia-Pacific Markets Outlook 2009 report, the international credit rating agency said that China and India would enjoy growth of 8 percent and 7 percent respectively next year, compared with a contraction of 0.9 percent in the US economy and a sluggish growth of 0.5 percent in the eurozone.

“[The] Asia-Pacific [region] is expected to be able to roll with the punches — although some economies such as Japan and Singapore are likely to experience quarters of negative GDP growth,” Subir Gokarn, S&P’s Asia-Pacific region chief economist, told a teleconference yesterday.

Aside from strong domestic demand in China and India, the supportive monetary policy stances adopted by regional governments would enable most economies to experience positive, albeit slowing, growth next year, he said.

Taiwan could outperform Australia, Hong Kong and New Zealand with a GDP growth of between 1.8 percent and 2.3 percent next year, the report said.

S&P said defaults by rated companies were expected to increase next year.

The number of negatives on S&P’s CreditWatch was about 19 percent, versus 5 percent for positives, regional chief credit officer Ian Thompson said.
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