Apac can withstand Covid-19 waves, S&P report says

0
69

KUALA LUMPUR: S&P Global Ratings believes low vaccination rates mean likely resurgences of new Covid-19 cases in some parts of Asia-Pacific in the next year or so.

“Government measures to suppress new infections will weaken economic growth and fiscal metrics further,” according to a report published on Monday.

S&P Global Ratings credit analyst Tan Kim Eng said: “Covid-19 does limited damage to the economic growth trend and structural fiscal performance of most sovereigns in the region.

“Consequently, most sovereign ratings in the region are likely to remain unchanged over the next one to two years.”

However, sovereigns’ fiscal resilience to future shocks could weaken as government debt levels rise further in the continued struggle with the pandemic.

Tan pointed out the impact of further waves of Covid-19 infections could lower the sovereign ratings that already have negative outlooks, especially if revenue growth disappoints and interest rates rebound by more than we expect.

“It could also drag on the upward momentum of other sovereign ratings.

“Based on our simulations, we don’t expect these pressures to change the overall stability of Asia-Pacific sovereign ratings.

“Our analyses estimate the impact of two further waves of outbreaks over the next year. Our conclusions are derived from the amount of buffer these sovereign ratings have before falling to a lower level,” he said.



Source link