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Moody’s mood darkens for GDP growth in Asia

Aug 23. 2019
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By The Nation

Moody’s Investors Service has trimmed its GDP growth forecast for 16 economies in the Asia-Pacific region.

It said on Friday that, of the 16, Hong Kong and Singapore have shown particularly weak expansions this year, with large deterioration in real GDP growth compared to the first half of 2018.

Moody’s said externally oriented economies saw a sharper slowdown during the first six months of 2019, while domestic factors have had a greater influence on growth in Japan, India and the Philippines.

Moody’s also pointed out that the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.

In particular, softer capital formation has mirrored the weakening in exports, especially for trade-reliant economies such as Korea and Hong Kong.

As for the Philippines, the delay in the passing of the government budget has disrupted its infrastructure build-out, while in Malaysia and Sri Lanka, fiscal tightening has posed drags. 

With India, a moderation in business sentiment and slow flow of credit to corporations have

contributed to weaker investment.

Moody’s said the slower overall GDP growth in the region had not yet weighed significantly on broader employment conditions, while generally benign inflation supports purchasing power.

Moody’s report covers Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Mongolia, New Zealand, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

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