Asia-Pacific 2020 outlook ‘negative’ due to China-US trade war: Moody’s
UNTV News • January 9, 2020 • 564
Singapore – Bond credit rating agency Moody’s said Thursday it had a “negative” outlook of Asia Pacific’s 2020 sovereign credit quality due to stalled growth caused by the trade war between China and the United States despite bilateral progress being made.
Moody’s said growth would suffer from the tensions between the two economic superpowers, despite the first phase of an agreement between Washington and Beijing – whose relationship will remain uncertain and volatile all year – being signed.
“Despite the phase one deal, the prospect of the US and China agreeing on long-term issues like industrial policy, intellectual property and market access remains highly uncertain,” Moody Vice President and Senior Credit Officer Martin Petch said according to a statement the agency published Thursday.
According to the agency, frictions will quickly spread through the global supply chain, which will impact Asia Pacific economies such as Hong Kong, South Korea, Malaysia, Singapore, Thailand or Vietnam.
Petch said Asia-Pacific is not only being affected by these tensions causing a trade volume slowdown but also because they’re affecting investment, making businesses wary of allocating and expanding their ventures.
Overall, Moody’s expects the region’s GDP to grow 4 percent between 2019 and 2021 – under the 4.4 percent registered in the 2014-18 period but strong by global standards.
Governments’ efforts to quell external and domestic growth stalls could prove risky for some countries, the report read.
The agency warned investment would be restricted and that this would result in the erosion of the fiscal position of several countries in the region, including India, Pakistan, China and Sri Lanka, which would reduce their ability to respond to adverse economic conditions.
In turn, it added, this would also reduce growth and exacerbate structural challenges the region has been seeing for some time. Lower growth would aggravate structural problems, including those such as aging population and youth employment in countries such as the Philippines, Indonesia and Malaysia.
Moody’s added that unpredictability made the region’s border markets more vulnerable, in which the agency evaluates 25 economies – with 19, two and four of them receiving stable, positive and negative forecasts respectively. EFE-EPA
MANILA, Philippines – Malacañang on Thursday (May 2) attributed the country’s higher credit rating to economic reforms implemented under the administration of President Rodrigo Duterte.
Global debt watcher Standard & Poor’s said the Philippines’ credit rating was upgraded to BBB+, citing strong economic growth, healthy external position and sustainable public finances.
Presidential Spokesperson Salvador Panelo said a higher credit rating means the Philippines is deemed a creditworthy sovereign and will have access to a wider pool of funds. He added that this is the highest credit rating upgrade in the country’s economic history.
“The Palace is pleased with the report from global debt watcher, Standard & Poor’s, that the Philippines has received a credit rating upgrade of BBB+ stable outlook, a step closer to bagging a single “A” grade,” Panelo said in a statement.
“A higher credit rating means a borrower country is a creditworthy sovereign that can have access to a wider pool of funds. This is the highest credit rating upgrade in the economic history of the Philippines,” he added.
Panelo also lauded the government’s economic team for a “splendid job in putting the economic house in order and spearheading bold economic reforms, in cooperation with Congress, in bolstering the domestic economy, which is projected to become the world’s top 25 economy.”
“These reforms include tax reform, liberalization of the rice sector, strengthening of the Bangko Sentral ng Pilipinas’ charter, ease of doing business, relaxing the foreign investment negative list and modernizing infrastructure, among others,” he said.
The Palace official added that Duterte understands that a thriving economy under an environment free from drugs, crime and corruption is essential to bring our people to a which is comfortable and secure.
“His actions based on this belief have thus promoted our country’s standing not just in peace and order but also in terms of our economy,” he said. (with details from Rosalie Coz)
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