By The Nation
James McCormack, managing director and head of sovereigns at the ratings company, on Tuesday highlighted that Fitch was forecasting global economic growth of 3.3 per cent and 3.1 per cent in 2018 and 2019, respectively, led by continued above-potential growth in the US supported by fiscal expansion, and strong growth in China – notwithstanding the ongoing trade war between the two nations.
Risks to the outlook, however, are growing, particularly for emerging markets, he said.
As global financial conditions tighten into next year with higher US interest rates, the end of quantitative easing by the European Central Bank and continued appreciation of the US dollar, international capital flows are likely to be more volatile, especially for emerging markets with the largest external funding needs and policy frameworks that are judged to be weaker, he explained.
Thailand, however, is very well-placed to deal with these global challenges, running sizeable current-account surpluses and maintaining a sound fiscal position, McCormack told the conference.
Further escalation of the US-China trade war is a threat to all open economies, including Thailand, and poses downside risks to 2019 growth projections, he added.
Parson Singha, senior director for financial institutions at Fitch Ratings (Thailand), noted that banking sectors in the Asia-Pacific were mostly well-positioned to cope with gradual, well-signalled US interest-rate hikes.