Global ratings agency Fitch yesterday cut its growth outlook for Asia next year to 6.8 percent from 7.4 percent previously, citing the weak global economy.
For this year, the region is seen growing at 7.1 percent, it said in a statement.
The downgrade was also to reflect the impact of policy tightening measures in some of the region’s economies, notably China and India where taming high inflation has been a major government priority, Fitch said.
It expects China’s economy to grow 8.2 percent next year instead of the 8.5 percent forecast in June, while it tipped India to expand 7.5 percent in the year to March 2013, instead of 8.2 percent previously estimated.
“The reduction partly reflects weakening in the outlook for the advanced economies since June,” Fitch said. “It is also partly driven by the impact of policy tightening in a number of Asian countries in response to stubbornly high inflation, including China and India.”
“Both China and India face a combination of slowing activity and stubbornly high inflation, underlining the risks that can arise from allowing inflation to rise above desired ranges,” the agency said.
Major exporter nations have been hurt this year as the ongoing debt crisis and economic stagnation in the crucial European and US markets has hammered demand and dragged on GDP growth.
For Asia, average annual inflation next year would be 4.9 percent, Fitch said, up from 4.7 percent. The region’s inflation outlook for this year was also hiked to 5.9 percent from 5.6 percent.