Fitch Ratings has painted a rosy picture of the Asia-Pacific region in its latest report, Asia-Pacific Cross-Sector Outlook 2024. The report forecasts strong growth in Asia-Pacific, particularly in emerging markets such as India, Indonesia, the Philippines, and Vietnam, all of which are expected to post GDP growth rates of 5% or more in 2024. Even China, which faces fears of a global slowdown, is expected to maintain its strong performance compared to other regions.

India has been a bright performer and is expected to grow by 7.2% in FY 2022-23, 6.9% in the current fiscal year and 6.5% in the next. This economic resilience bodes well for sectors such as banking, with banks in India and Indonesia expected to perform well.

Despite headwinds such as slowing growth in China, weak global demand and rising interest rates, Fitch remains neutral on the outlook for most sectors in Asia in 2024. This reflects the underlying strength of Asian economies, their ability to adapt to changes in the environment, and the potential for continued growth in key sectors such as technology and healthcare.

Geopolitical tensions, particularly between the US and China, remain a concern. However, recent efforts to ease these tensions may encourage businesses to diversify their supply chains and mitigate potential disruptions.

Forecast Highlights:

Fitch forecasts that GDP growth in India, Indonesia, the Philippines, and Vietnam will reach or exceed 5% in 2024.
The Indian and Indonesian banking sectors are expected to perform well.
Negative factors such as slowing growth in China, weak global demand and rising interest rates have been recognized but are not expected to undermine overall regional growth.
Geopolitical tensions remain a concern, but recent efforts to ease them could lead to positive developments.
In summary, Fitch paints a picture of a dynamic Asia-Pacific region, driven by strong economic growth in emerging markets and resilient performance in key sectors. While there are some challenges, the overall outlook is positive, supported by the region’s strong fundamentals and its ability to adapt to changing global dynamics.