President-elect Donald Trump’s proposed protectionist policies could disrupt trade, which would be particularly damaging to emerging-Asia’s more open economies says, Fitch Ratings’ 2017 outlook on Asia.
The US election outcome has already led to expectations of higher US interest rates, and a stronger US dollar. Dollar strength would hurt exporters in APAC and make it more difficult for borrowers to service dollar-denominated debts.
Most of Asia-Pacific’s (APAC) banking sectors are facing a cyclical deterioration in asset quality in 2017, as a challenging economic environment continues to put pressure on borrowers.Fitch Ratings’ 2017 outlook on more than three-quarters of the banking sectors in the region is negative. Earnings and capital buffers are generally strong enough to withstand these trends, but we expect Viability Ratings to remain under pressure in China and India.
There has been a rapid build-up of private-sector debt - corporate and household - in a number of APAC economies since 2009, and the vulnerabilities that this has created will continue be tested in 2017.
Fitch expects economic growth in emerging-market (EM) Asia to moderate further to 6.4% in 2017, which is still faster than in other regions but down from an average of 7.8% in 2010-2014.
0 comments: