(Australian Associated Press)
A global credit ratings agency says China is doing all the right things that will eventually be to the benefit of Australia.
Standard & Poor’s thinks it may take some time, but all the pieces are in place to make this happen including exchange rate and market flexibility, strong government and nimble financing.
“We see (Australian) growth of 2.5-3 per cent over the next few years, but will be monitoring the composition of investment and exports away from the mining sector,” S&P chief economist for Asia-Pacific Paul Gruenwald said as he released new forecasts for the region.
Despite a tumultuous start to 2016 amid market volatility, the agency still expects the Asia-Pacific to lead global economic growth, both this year and next.
S&P KEY ECONOMIC GROWTH FORECASTS FOR ASIA PACIFIC
* S&P forecasts regional growth of 5.3 per cent in 2016 and 5.2 per cent in 2017.
* China to grow 6.3 per cent this year and 6.1 per cent in the next.
* India to lead the pack with growth of 7.9 per cent in its financial year ending March 2017.
* Japanese growth cut to 0.8 per cent for 2016, but 2017 forecasts unchanged at 0.4 per cent.
Mr Gruenwald says concerns leading up to the global market sell-off at the start of the year, while having some validity, were “overdone and even a bit misguided”.
“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,” he said.