Asia-Pacific Sovereigns Face Growing Pressure on Credit Profiles

October 17, 2013

Link to Fitch Ratings' Report: Asia-Pacific Sovereign Overview Q313HONG KONG, October 16 (Fitch) Sovereigns in the Asia-Pacific face rising pressure on their credit profiles due to a structural slowdown in many economies, although the only negative rating action taken during Q313 was the revision of Malaysia's Outlook to Negative, Fitch says in a new report. "The extent to which authorities can implement credible, coherent macroeconomic policies will likely be a key question for regional sovereign ratings," said Andrew Colquhoun, Fitch's Head of Asia-Pacific Sovereigns. The "Asia-Pacific Sovereign Credit Overview Q313" includes Fitch's revision of the Outlook on Malaysia's 'A-' rating to Negative from Stable in July. The revision reflected the agency's view that the government's narrow win in May's elections curtailed its room for manoeuvre in implementing fiscal consolidation and structural fiscal reforms that would head off pressure on the credit profile. Malaysia joins Japan as the only two Asia-Pacific sovereigns on Negative Outlook in Fitch's rating universe. India and Indonesia (both BBB-) have come under a degree of market pressure over the summer. They remain on Stable Outlook, although their starting positions of relatively wide current-account deficits and high inflation mean that 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 and the report includes updated rating rationales for those countries. Contact: Andrew Colquhoun Senior Director +852 2263 9938 Fitch Ratings 2801, Tower Two, Lippo Centre 89 Queensway, Hong Kong Art Woo Director +852 2263 9925 Media 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 AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.