Fitch ratings remarks via Reuters:
- Most APAC economies have started 2017 with good momentum
- Regional growth is likely to remain relatively healthy by global standards during the rest of the year
- APAC sovereign rating trends are mostly stable
However, several rising challenges are likely to weigh on growth as the year wears on:
- Tighter global financial conditions
- Another round of US dollar appreciation could create strains
- China's economy is likely to ease, which would dampen external demand around the rest of the region
- A potential increase in global protectionism might also undermine export performance
- Geopolitical risks - such as those centring on North Korea - could dampen business sentiment
Fitch forecast two more US rate hikes in 2017, and another four in 2018
- Eventually, we expect the Fed Funds rate to normalise at 3.5%-4.0% by 2020
- Higher US rates are likely to drive renewed appreciation of the US dollar
- Higher debt-servicing costs in Asia might create pressures in countries where debt has built up rapidly during the period of very low interest rates