But the agency, which incurred Washington’s wrath at the weekend by cutting its AAA rating by a notch to AA+, said a fresh global financial crisis could hurt some Asian sovereigns harder this time around.
“If a renewed slowdown comes, it would likely create a deeper and more prolonged impact than the last one,” S&P said in a statement.
But for the moment, it added, the outlook for most Asia-Pacific sovereign borrowers remains stable, underpinned by sound domestic demand, relatively healthy corporate and household sectors, plentiful external liquidity and high savings rates — though it listed New Zealand, Japan and Vietnam as exceptions to this.
It based its regional assessment on an assumption that there would likely be no “abrupt dislocations” in the financial systems and real economies of major developed nations stemming from Europe’s debt crisis and Washington’s debt problems.
However, if this assumption proved to be wrong, and there was a re-run of the 2008-2009 global financial crisis, S&P said the impact on some export-oriented Asian nations could be harder this time around.
The agency said most Asian nations could respond promptly in a crisis to provide financial stability and economic stimulus, but others could be restrained by heavy reliance on offshore funding or by their budget “scars” from the last crisis.
It listed countries vulnerable to disruptions in offshore capital markets as Pakistan, Sri Lanka, Fiji, Australia, New Zealand, South Korea and Indonesia.
It listed those still repairing their government finances as Japan, India, Malaysia, Taiwan and New Zealand.
