Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Moody's cuts global sovereign rating outlook to "negative" for 2020

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/11/2019 | 07:41am EST
A Moody's sign is displayed on 7 World Trade Center, the company's corporate headquarters in New York

Rating agency Moody's cut its global sovereign outlook for 2020 to 'negative' from 'stable' on Monday, saying disruptive and unpredictable world politics would slow growth and increase the risk of economic or financial shocks.

Moody's, which has already slapped downgrade warnings on Britain, South Africa, India, Mexico, Turkey and Hong Kong, said there were three main drivers behind the move.

Unpredictable politics and trade wars such as that between the United States and China would weaken open and commodity-exporting economies.

The increasingly antagonistic environment was also likely to damage global and national institutions, which together with lower growth, raises the probability of crises but reduces the capacity to deal with them.

"In an unpredictable environment, growth and credit risks are tilted to the downside," Moody's said in a report on the 142 countries it rates and their $63.2 trillion of sovereign debt.

"There are few silver linings, and a rising risk of more negative outcomes," it added. "Unpredictable politics create an unpredictable economic and financial environment."

While the starkest example remains the U.S.-China trade spat, tensions that diminish growth have also risen in the Gulf, between Japan and Korea, India and Pakistan, the U.S. and the EU, and the EU and Britain.

The first-order effect of these strains – for example, the impact of tariff increases on trade volumes - is not always severe, but the knock-on impact on investment and capital flows is likely to damage both near- and medium-term growth prospects across all regions.

Moody's now expects growth in G20 group of top world economies to stay around 2.6% next year, after 3% in 2018.

Countries embedded in global supply chains that rely on trade for growth – such as Hong Kong (Aa2 negative), Singapore (Aaa stable), Ireland (A2 stable), Vietnam (Ba3 rating under review for a downgrade), Belgium (Aa3 stable), Czech Republic (Aa3 stable) and Malaysia (A3 stable) – face a slowdown in their economies.

Others with large current account deficits and most reliant on external capital – Lebanon (Caa2 RUR-), Mongolia (B3 stable), Tunisia (B2 negative), Pakistan (B3 negative), Sri Lanka (B2 stable), Argentina (Caa2 RUR-), Turkey (B1 negative), and to a lesser extent Indonesia (Baa2 stable) and South Africa (Baa3 negative) – are most exposed to financing shocks meanwhile.

"Recent years offer ample evidence of the scope for reversals in capital flows, which, if sustained, can profoundly damage recipient country fundamentals," the report said.

(To view Moody's rating hotspots for 2020, click https://fingfx.thomsonreuters.com/gfx/mkt/12/8513/8438/Pasted%20Image.jpg)

By Marc Jones

Stocks mentioned in the article
ChangeLast1st jan.
EURO / ARGENTINE PESO (EUR/ARS) -0.02% 66.584 Delayed Quote.53.54%
SILVER -0.19% 16.912 Delayed Quote.9.11%
US DOLLAR / ARGENTINE PESO (USD/ARS) -0.01% 59.959 Delayed Quote.58.99%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.27% 5.753 Delayed Quote.9.01%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
04:12a'Moving right along'? Shares nudge up after Trump trade talk
RE
04:11aJapan's households tighten purse strings as sales tax, typhoon hit
RE
04:05aCMA flags price concerns in Stonegate/Ei pub deal
RE
04:03aSaudi, Russia look to seal deeper output cuts with producers
RE
04:01aSterling slips after three-day rally, set for best week since mid-October
RE
03:56aUK house price growth hits seven-month high in November - Halifax
RE
03:52aChina to waive tariffs on some U.S. soybeans, pork
RE
03:38aChina to waive tariffs on some U.S. soybeans, pork
RE
03:31aWorld Bank adopts $1 billion-plus annual China lending plan over U.S. objections
RE
03:29aWorld Bank adopts $1 billion-plus annual China lending plan over U.S. objections
RE
Latest news "Economy & Forex"