Asia-Pacific seems to rebound as economic developments start to stabilize

The economic environment in the Asia-Pacific region seems to have calmed down in the past month, S&P Global Ratings reported yesterday. Anxiety over China’s economy has stabilized in the past few weeks, but continues to be a major risk factor to Asia-Pacific.

"Anxiety surrounds the perceived un-sustainability of credit growth needed to support China's GDP growth target. We see no real danger to the authorities achieving their 6.5 pct-7.0 pct GDP growth target this year," said Paul Gruenwald, Asia-Pacific Chief Economist,S&P Global Ratings'.

Japan's pace of economic activity remains lackluster, pulled down mainly by a weak external environment. GDP growth looks to be off to a slow start in 2016 despite negative interest rates and what appears to be a tight labor market, the report mentioned.

India remains largely protected from the Chinese volatilities facing the rest of the region. The structural reform agenda and broadening growth drivers remain keys to ensuring that medium-term growth stays at around 8 pct. The report also noted that policy rates in the Asia-Pacific region should be on hold for most of 2016, despite the recent surprise cut by Reserve Bank of Australia.