Confidence in the business outlooks for Asia's largest companies waned this month, after a new benchmark survey revealed that mounting concerns over the Eurozone crisis, a slowdown in China and rising costs dampened positivity.

According to the Thomson Reuters/INSEAD Asia Business Sentiment Index (RACSI), a reading above 50 indicates an overall positive outlook. However, the latest set of results saw the index slide to 69 in June from 74 in March.

The poll, which was conducted by Thomson Reuters and management business school INSEAD earlier this month, showed that over 60 percent of respondents feel that global economic uncertainty is the biggest risk they face, while over 15 percent believe that the risk of rising costs will effect business the most.

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The poll had a record amount of respondents this month, as 177 Asian companies delivered their thoughts on their business outlook for the next six months.

Eurozone crisis contagion

The ongoing Eurozone sovereign debt crisis has had a significant impact on all other global economies, as contagion has spread across Asia, the US and especially throughout the emerging markets.

While, Asia is tipped to have weathered the storm better than others, there is no doubt that fears over a lack of long-term Eurozone sovereign debt crisis containment could change this situation.

"The world economy has changed dramatically since September 2011," said the International Monetary Fund (IMF) in its 'World Economic Outlook' report this year. "European growth has slowed sharply, and many economies in the region are now in or close to recession. Asia has weathered the global slowdown well and looks headed for a soft landing. Sub-Saharan Africa has been surprisingly resilient to the European slowdown, reflecting an ongoing redirection of its economic linkages toward Asia."

"Outside Europe, spillovers from the euro area are likely to have limited effects on economic activity for as long as the euro area crisis is contained, as is assumed in the projections. The key channels are lower confidence, less trade, and greater financial tension. Contagion from the turbulence in the euro area caused a significant drop in capital inflows to many emerging market economies, resulting in higher interest spreads and lower asset prices," said the IMF in its report.

However, with Greece still trying to negotiate its bailout agreements with Europe and uncertainty surrounding Spain's total bailout amount, following a delayed audit of exact the country's banks' balance sheets, Asia could still be in for a turbulent ride.

Asia Calls for G20's Battle Plans

Asia's main stocks markets have been hit hard by the Eurozone sovereign debt crisis contagion over the last year.

Hong Kong's Hang Seng Index is down by over 9 percent from exactly a year earlier, while Japan's Nikkei 225 is also down by similar levels.

China's Shanghai Stock Exchange Composite Index is down over 12.5 percent from exactly one year ago, which reflects the country's slowdown in growth.

China's economy has slowed over the past year but GDP growth figures are still far higher than the ailing Eurozone.

Analysts have downgraded growth projections across the board and consensus sees China's GDP slowing to around 7.9 percent. At-face-value, the downgrade seems low, compared to previous years of growth of 9 percent - 10 percent.

However, the government, especially over the last 18 months, has been trying to engineer a slowdown and curb inflationary pressures and rebalance the economy but senior commentators, such as Ministry of Finance researcher Jia Kang, have warned that China shouldn't allow annual economic growth to slip below 7.5 percent and more support measures might be needed.

China's government has set a GDP growth target of 7.5 percent for 2012, but concern over global economic conditions, stemming from the Eurozone crisis has caused concern over whether the country will meet that target.

According to the Reuters and INSEAD index, sentiment in industry sectors heavily dependent on the global economy, such as shipping and financials, deteriorated the most, which does highlight how Asia is still susceptible to a worsening Eurozone crisis.

The G20 Summit in Mexico this month is pivotal point in the year for Asia and especially China.

"The overarching policy priority in Europe is to prevent further escalation of the sovereign debt and growth crisis in the euro area while working toward resolution of the underlying causes," said the IMF's report. "This requires policy adjustment in a number of areas at both the country and the euro area levels. Most economies in the region need a policy mix that supports the recovery while addressing fiscal sustainability challenges and financial sector vulnerabilities. Appropriate fiscal consolidation is an obvious priority. Euro area economies in crisis and countries with weaker fiscal positions (Italy, Slovenia) need to implement recently agreed plans to tighten the fiscal stance."

While the formal communiqué from the G20 has not yet been released, the IMF's managing director Christine Lagarde said the emergency fund has been bolstered by China.

The IMF fund will be crucial to the Eurozone as it will serve to support governments that are struggling to cope with debt repayments and therefore halting the risk of a default.

The country pledged another $43bn at the G20 summit in Los Cabos, Mexico this week, bringing the fund total to $456bn. Japan also said to plough $60bn into the fund.

However, the sizeable offering puts pressure on the rest of the Eurozone G20 countries to draw up a more concrete long-term strategy in tackling the crisis.

Before the summit started, Chinese Vice Finance Minister Zhu Guangyao said that the other "Bric" countries - Brazil, Russia and India - would meet ahead of the meeting as they hope to leverage their contributions as they seek greater voting power in the western dominated fund.

"The EU has to make up its mind to untangle this problem and to address the government indebtedness, banking indebtedness, and the relation between the two," said Zhu.

"We are confident that the European countries can rely on themselves to untangle their problems."

Singapore's Resilience

While China and other advanced Asia economies have reported slowdowns in growth and mounting uncertainty in the future, IBTimes UK highlighted this week how Singapore has provided a beacon for growth in the region.

The triple-A rated powerhouse at the heart of Asia has an economy that is growing faster than all of its regional rivals, following a tightly controlled currency and booming exports.

A Moody's Investors Service report on Singapore published Tuesday highlights the resilience of one of the world's only top-rate economies "despite the openness of its economy and its dependence on global trade and finance."

Singapore's economy expanded by 10 percent in the first three months of the year from the previous quarter and growth has averaged more than 6 percent over the past five years. On purchasing power parity terms, it's the richest nation in Asia and ranks as the top global economy by the World Bank in terms of ease of doing business.

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