S&P expects Asia-Pacific region to lead global growth this year and next

In a report published today titled "After Asia-Pacific's Rocky Start To 2016, Is All Quiet On The Eastern Front?" rating agency S&P noted that despite a tumultuous start to the year, Asia-Pacific region will lead global growth this year and next.

"We believe the market's concerns leading up to the sell-off in global markets, while having some validity, were overdone--and even a bit misguided," said Paul Gruenwald, Standard & Poor's chief economist for Asia-Pacific.

Standard & Poor's GDP forecast for the region is little changed from November 2015 at 5.3% for 2016 and 5.2% for 2017. It maintained China GDP growth forecasts of 6.3% for 2016 and 6.1% for 2017. Japan's 2016 GDP growth forecast was lowered to 0.8% (from 1.1%) due to a weak finish in 2015 and 2017 forecast was kept unchanged at 0.4%.

The agency noted that the task for other Asia-Pacific economies will be to ensure that flexible markets and sound policies will help them to adjust successfully to China's new growth drivers. It stressed upon the fact that reform were the only path to higher growth for Asia-Pacific.

"We think that the real challenge is picking up the pace of structural reforms China needs to implement as it moves toward a more consumption- and services-based model with a greater role for the marketplace." added Paul Gruenwald.