Weaker global growth, coupled with softer demand from China, has New York City-based Moody’s Investors Service lowering its gross domestic product (GDP) growth forecasts for many of the sovereigns in the Asia Pacific (APAC) region, according to a new report published on Tuesday.

The credit rating agency has trimmed its growth forecasts for many of the countries in Asia, as Chinese demand has “dampened the overall export outlook for the region, while softer commodity prices weigh on some sovereigns’ export revenues, growth and fiscal balances,” the report says.

Domestic demand in most of the region’s countries is unlikely to be able to offset the effect of slower global growth, the report adds, “partly because an anticipated investment boost from government infrastructure spending has not materialized in some cases.” In addition, the report notes that households are saving more of their income gains from lower energy costs than previously expected, and market volatility and political risk are also weighing on confidence.

Credit profiles for most of these sovereigns are resilient to lower growth, the report explains, because most other credit indicators, such as government debt and balance of payments ratios, remain at expected levels. The report stresses that growth in Asia is slowing from high levels, and remains stronger than most other regions.

“The risk of deflation at this point is minimal, while lower oil prices have supported current account and fiscal positions in many Asian countries; offsetting the risks from slower growth and external financial volatility,” the report says, adding that Moody’s expects that the pressures on the currencies in many Asian countries will continue, “as international markets respond to slower emerging market growth, and potential U.S. Federal Reserve action.”