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Moody's Investor Service said on Tuesday that Asia will be resilient to global macro-economic challenges in 2015, with less vulnerability to external shocks than other emerging economies and with sound fundamentals that compare well with many regions in the world.
"As global growth remains subdued with brighter prospects in the US offset by lacklustre growth in the Euro Area and Japan, and China's ongoing slowdown, Asia's resilience will become increasingly evident," Michael Taylor, Moody's Chief Credit Officer, said.
The Global credit rating agency said that the global challenges for 2015 include the US Federal Reserve taking the first steps to normalize monetary policy, sustained low commodities prices and China's rebalancing.
But Asia is supported by healthy external vulnerability metrics and the policy space to support growth through accommodative domestic monetary and fiscal policies, Moody's added.
Moody's expects capital inflow to Asia Pacific to moderate in 2015, but offshore borrowing costs are expected to remain below historical norms.
Falling crude oil prices will have a positive effect due to the regions's status as the a net oil importer and the opportunity for governments to pare back subsidies.
However, the agency listed four key risks for the upcoming year. This included, a deeper-than-expected property downturn in China, high leverage in certain sectors, renewed eurozone concerns and a spike in global financial market volatility.
"Elevated household debt to GDP ratios in certain areas in Asia-Malaysia, Thailand, and Singapore, among others-could become a concern if interest rates spike during the year, " Moody's added.
