(The following was released by the rating agency) Aug. 8, 2011--For the moment, the generally stable outlooks for Asia Pacific sovereigns (with the exception of New Zealand, Japan, Vietnam, and the Cook Islands) is supported by sound domestic demand, relatively healthy corporate/household sectors, plentiful external liquidity, and high domestic savings rates. *Our baseline assumption of no likely abrupt dislocations in developed economies' financial and real economies underpins this opinion*.
*However, given the interconnectivity of the global markets, an unexpectedly sharp disruption in developed world financial markets could change the picture*. It could lead the U.S. and European economies into deep contractions again, or further delay their recoveries. In this scenario, the experience of the global financial crisis of 2008-2009 shows that export-dependent economies with large exposures to the U.S. and/or Europe would feel the most pronounced economic impacts. At the same time, *the Asia-Pacific sovereigns that have weaker external positions could come under pressure as international liquidity tightens*. *Some may require additional external assistance to prevent sharp economic adjustments*. *Those with financial systems reliant on off-shore markets may face reduced liquidity and a heightening of refinancing risk in the near term*. To varying degrees, Pakistan, Sri Lanka, Fiji, Australia, New Zealand, Korea, and *Indonesia may be affected*. The adverse impact on Asia Pacific in that scenario would likely require governments to use their balance sheets to support their economies and financial sectors once again. And in our opinion, most governments would promptly oblige. *We wait to see*. http://www.reuters.com/article/2011/08/08/markets-ratings-us-asiapacific-idUSWNA599220110808 '+'
