Asia set for solid growth despite Japan quake: S&P

Asia is poised for another year of solid growth in 2011 even if the impact of the killer earthquake and tsunami on Japan remains unclear, Standard and Poor's said Wednesday. "We expect the region to record another year of solid growth in 2011 after 2010 proved that Asia is emerging from the (global financial) crisis in a strong position, even as the economic picture for Japan following the recent earthquake remains less clear," said Tom Schiller, a senior regional analyst.
However, growth for the region with the exception of Australia and New Zealand is expected to moderate slightly from last year because of ongoing worries over the US and eurozone economies, Standard and Poor's said. Inflationary pressure is a key concern for the region, which faces the prospect of tighter monetary policies as authorities seek to temper price rises, it said in its twice-yearly regional outlook.
"Rising prices stem in part from rapid growth and the easy credit conditions that the region's governments put in place to support their economies during the global financial crisis," the credit ratings firm said. In a separate report, Moody's Analytics said the global economy was not expected to be affected badly by the crisis in Japan. Japan accounts for around seven percent of global output and "a near-term contraction in the Japanese economy thus will subtract little from global GDP (gross domestic product) growth", it said. In its report on Asian economies, Standard and Poor's said regional central banks may also consider further capital control measures and other actions to prevent risky assets bubbles.
China is projected to grow 9.1-9.6 percent in 2011, lower than last year's 10.3 percent and this is expected to weigh on the rest of the region, it said. Japan, which is struggling to cope with the devastation wrought by a magnitude 9.0 earthquake and tsunami on Friday, that triggered a crisis at a nuclear power station, would grow 1.3-1.8 percent, slower than last year's 4.0 percent. South Korea's economy is projected to grow 4.3-4.8 percent from 6.1 percent in 2010. Within Southeast Asia, Singapore's growth is to moderate sharply to 4.5-5.0 percent from 14.5 percent last year, Malaysia is seen expanding 4.8-5.3 percent and Indonesia to grow 5.9-6.4 percent from 6.1 percent.