In its latest report released on Wednesday, the US-based Fitch Ratings highlighted that the Asia-Pacific (APAC) sovereigns are set to recover amid lingering rating pressures.
Key findings
“Economic momentum should turn positive in 2H20 as domestic lockdowns are eased and external demand gradually improves, limiting the drop in regional economic output to 1.7% in full-year 2020.
Despite this, a number of APAC sovereigns will continue to face negative rating pressures amid the shock from the coronavirus pandemic, particularly from deteriorating public finances and, in some cases, external financing risks.
More generally, when governments fail to present credible medium-term strategies for stabilising or reversing the recent rise in debt-to-GDP levels after the crisis subsides, this could strain ratings.”
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