Link to Fitch Ratings' Report: Emerging Asia: Slowing Growth Amid Market PressureHONG KONG, October 02 (Fitch) Credible, coherent economic policy management by authorities in Emerging Asia will likely be the central factor in determining regional sovereign credit outlooks, as the economies face their weakest growth prospects since 1998, Fitch Ratings says in a Special Report. Fitch believes the two main factors affecting the growth outlook for Emerging Asia are: Tighter global monetary conditions as the Fed tapers quantitative easing, and downward pressure on non-fuel commodity prices from China's slowdown. The currency and asset-price volatility over summer 2013 point to the market's continuing re-assessment of Emerging Asia's prospects. Fitch in its September Global Economic Outlook revised down its projection for Emerging Asian growth to 5.7% for 2013 and 5.8% in 2014, from 6.4% and 6.5% respectively at the December 2012 forecast round. Fitch believes the main factors weighing on growth are likely to be long-lasting, implying a structural downshift in growth expectations. Excluding China, the region's GDP-weighted nominal effective exchange rate fell 6.7% by end-August 2013 from end-2012. Again excluding China, aggregate regional foreign exchange reserves were down 7.2% over the same period. Countries experiencing the greatest pressure on their currencies and reserve levels are those where weakening current-account positions and persistent inflationary pressure have raised doubts over the credibility of policy management - India and Indonesia in particular. Fitch sees limited scope for policy slippage for either sovereign at the current rating levels of 'BBB-' with Stable Outlook. Malaysia (A-/Negative) and Thailand (BBB+/Stable) have likewise seen erosion of their current-account surpluses. Inflation has been lower and more stable in both countries than in India or Indonesia. The reduction of Malaysia's current-account surplus partly reflects heavy public-sector investment spending and so is a "twin deficit" - a key factor behind the assignment of a Negative Outlook to the ratings in July. Thailand has a combination of a sharp slowdown in activity, near-zero real interest rates, a current account hovering on the brink of deficit, and an expected material rise in its fiscal deficit in 2014 that could affect the credit profile and investor confidence. However, the country's large net external creditor position and moderate public debt offer important buffers. Nonetheless, high and rising household debt add to the risks for both economies. Fitch does not see a repeat of the region's 1997-98 financial crisis as likely at this time because of stronger regional sovereign credit profiles - in particular, external balance sheets. Emerging Asia, excluding China, has six months of imports in reserves now in aggregate, against less than four months in 1996. Indonesia, Malaysia and Thailand ran current-account deficits of 3.4%, 4.4% and 8.1% of GDP respectively in 1996, against a 3% deficit, close to balance and a 3% surplus respectively projected for 2013. "Emerging Asia: Slowing Growth Amid Market Pressures" is available from www.fitchresearch.com or by clicking on the link above. Contact: Andrew Colquhoun Senior Director +852 2263 9938 Fitch Ratings 28th Floor, Tower Two, Lippo Centre 89 Queensway, Hong Kong Anna Thung Associate Director +852 2263 9921 Art Woo Director +852 2263 9925 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.