Leading rating agency Standard & Poor's has cut India's growth forecast for 2012 by one percent to 5.5 percent, as the entire Asia-Pacific feels the pressure of ongoing economic uncertainty.

"Although Asia-Pacific has recorded strong GDP growth relative to other global economies, we have observed a continued change in the region's economic barometer," said S&P ratings in a statement.

Lack of monsoon rains has affected India, where agriculture still forms a substantial part of the economy, said S&P in its report titled 'Asia-Pacific feels the pressure of ongoing global economic uncertainty.'

Additionally, the more cautious investor sentiment globally has seen potential investors become more critical of India's policy and infrastructure shortcomings, the credit rating agency said.

S&P credit analyst Andrew Palmer said it had also lowered base case forecasts of 2012 real GDP growth by about half a percentage point for some countries, such as China to 7.5 percent, Japan to 2.0 percent, Korea to 2.5 percent, Singapore to 2.1 percent, and Taiwan to 1.9 percent.

It has also cut GDP forecast by around one percent for Hong Kong to 1.8 percent. For Australia, the forecast is marginally down to three percent from the 3.2 percent. However, the GDP forecast for Philippines has been increased to 4.9 percent from the 4.3 percent, reflecting the ongoing strength of that domestic economy.

"Credit conditions for rated portfolios in Asia-Pacific remain mixed. We have factored our base case GDP scenarios into our current ratings and issues in the region. At this stage, the short-term impact of the greater-than-anticipated slowdown on credit ratings is likely to be limited to the more leveraged entities," Palmer said.

"Naturally, any worsening of the economic conditions in the Eurozone will increase the contagion risk for Asia-Pacific, given the region's particularly 'the open economies' — sensitivity to capital flows and trade," Palmer concluded.

Earlier this year, Standard & Poor's said that India could become the first of the BRIC economies to lose its investment-grade status.

"Slowing GDP growth and political roadblocks to economic policy making are just some of the factors pushing up the risk that India could lose its investment-grade rating," the ratings agency said in a Monday statement on a report dated June 8.

Addressing a gathering at an educational institution in Chennai on Monday, C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council and retired Governor of the Reserve Bank of India, said S&P's GDP assessment was incorrect, and that growth would pick up in the second half and would be 6.7 percent this year. The average rate of growth in the next six years will be 8.2 per cent, he added.

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