Asia-Pacific Sovereigns Face Growing Pressure on Credit Profiles

Reuters

Link to Fitch Ratings' Report: Asia-Pacific Sovereign OverviewQ313HONG KONG, October 16 (Fitch) Sovereigns in the Asia-Pacificface rising pressure on their credit profiles due to a structural slowdownin many economies, although the only negative rating action taken duringQ313 was the revision of Malaysia's Outlook to Negative, Fitch says in a newreport."The extent to which authorities can implement credible,coherent macroeconomic policies will likely be a key question for regional sovereignratings," said Andrew Colquhoun, Fitch's Head of Asia-Pacific Sovereigns.The "Asia-Pacific Sovereign Credit Overview Q313" includesFitch's revision of the Outlook on Malaysia's 'A-' rating to Negative from Stable inJuly. The revision reflected the agency's view that the government'snarrow win in May's elections curtailed its room for manoeuvre in implementingfiscal consolidation and structural fiscal reforms that would head off pressure onthe credit profile. Malaysia joins Japan as the only two Asia-Pacificsovereigns on Negative Outlook in Fitch's rating universe.India and Indonesia (both BBB-) have come under a degree ofmarket pressure over the summer. They remain on Stable Outlook, although theirstarting positions of relatively wide current-account deficits and high inflation meanthat room for policy slippage is limited at current rating levels.Fitch affirmed the ratings of Hong Kong (AA+/Stable), Korea(AA-/Stable), New Zealand (AA/Stable) and Taiwan (A+/Stable) over the quarter andthe report includes updated rating rationales for those countries.Contact: Andrew ColquhounSenior Director+852 2263 9938Fitch Ratings2801, Tower Two, Lippo Centre89 Queensway, Hong KongArt WooDirector+852 2263 9925Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935,Email: wailun.wan@fitchratings.com.Additional information is available at www.fitchratings.com.ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS ANDDISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THISLINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION,RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLEON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS,CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'SCODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATEFIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLEFROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHERPERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES.DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN ANEU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUERON THE FITCH WEBSITE.

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