Moody’s Investors Service says that its outlook for sovereign creditworthiness in Asia Pacific (APAC) in 2019 is stable overall, reflecting its expectations for the fundamental credit conditions that will drive sovereign credit over the next 12-18 months.
Solid domestic fundamentals, including rising incomes and competitiveness, generally ample foreign exchange reserves and often sizeable domestic savings, will continue to underpin government credit quality.
However, growth is slowing and further downside risks have intensified. Risks stem from tensions between the US (Aaa stable) and China (A1 stable), tightening global financing conditions, and shifting political and policy priorities domestically. A weaker economic outlook means that the window for addressing credit challenges is closing.