Asia sovereign ratings seen as stable in 2018, S&P says
Most Asia-Pacific sovereign ratings are likely to remain unchanged in the next one to two years, said S&P Global Ratings in a report titled Asia-Pacific Sovereign Rating Trends 2018.
All but two of the agency’s sovereign ratings in the region record a stable outlook.
“Although economic growth rates this year are likely to be lower than 2017's, our current real GDP forecasts are mostly stronger than our 2018 growth forecasts made a year earlier. The better numbers since last year reflect stronger external demand. For this reason, export-oriented economies such as Hong Kong, Malaysia, and South Korea saw the largest positive revisions in growth forecasts,” said S&P Global Ratings credit analyst Kim Eng Tan.
“Nevertheless, abrupt capital outflows remain a key risk to regional sovereign rating support, given that sharp asset price corrections are likely to accompany a large withdrawal of funds. If investor confidence weakens sharply to cause a steep decline in real estate prices, this could affect several
Asian economies negatively.
“The risks associated with the high level of corporate debt in China could stabilise in the near future if the government follows through with its deleveraging policy,”
