HONG KONG, Feb 27: Standard & Poor’s said on Monday that regional growth prospects in China, India, Pakistan and Vietnam were supportive of credit quality in those countries.

The rating agency said in a report that there was some upside potential in the credit quality of those countries.

“Sovereign governments in Asia Pacific are expected to continue their reforms programs in 2006, thereby improving their country’s credit fundamentals. This in turn should continue the upward rating trend for the region,” says Standard & Poor’s Ratings Services in a collection of reports published on Monday as the “Asia-Pacific Sovereign Report Card”.

Good global growth and still-ample liquidity conditions will underpin positive credit trends in the region. This trend should be assisted by probable robust GDP growth of six per cent in the region, although, there are uncertainties that might affect growth: sustained high oil prices, inflation, and strength of US demand.

“Regional growth prospects are projected to support credit quality, with trend growth rates likely to be maintained and some upside potential in China, India, Pakistan, and Vietnam,” Standard & Poor’s credit analyst Ping Chew said. “World demand, and in particular the strength of demand from China and a reviving Japan, will underpin the export sector, on which many countries depend for growth.”

Asia-Pacific sovereign ratings have improved steadily over the past few years. In the past three years alone, there were 14 upgrades but only four downgrades, while in 2005 there were four upgrades to one downgrade. With the addition of Sri Lanka in 2005, Standard & Poor’s now rates 19 sovereigns in the region and 110 globally.—Reuters