KUALA LUMPUR: Moody's Investors Service has a negative outlook for Asia Pacific (AsiaPac) sovereign creditworthiness in 2020, due to slower economic growth, a turbulent external environment and some governments' reduced capacity to respond to shocks.
In its report issued on Thursday, the rating agency said a gradual slowdown in growth globally, exacerbated by trade tensions between China (A1 stable) and the US (Aaa stable) -- notwithstanding the phase one trade deal – would constrain the credit quality of rated sovereigns in AsiaPac.
"Despite the phase one deal, the prospect of the US and China agreeing on long-term issues like industrial policy, intellectual property and market access remains highly uncertain. As a result, the US-China trade relationship will remain a source of uncertainty and volatility in 2020," Martin Petch, a Moody's vice president and senior credit officer, said.
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