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Sovereigns

Global Home > Sovereigns

Credit Hospot: Brexit

Latest: Brexit Uncertainty Makes Smooth Transition Less Likely

External Finance Risks Constrain New Pakistan Government

Pakistan's incoming PTI-led coalition government, which took office this week, will be under immediate pressure to arrest the deterioration in external finances and address fiscal challenges, as well as to attract the external funding necessary to meet its financing gap.

Rating Action

Malaysia Affirmed at 'A-'; Outlook Stable

Malaysia's Long-Term IDRs are supported by solid economic growth and a net external creditor position built up from a record of current-account surpluses. These strengths are offset by elevated government and private sector debt, and low per capita income and World Bank governance scores relative to rating peers. 

rating action

Fitch Upgrades Greece to 'BB-' from 'B'; Outlook Stable

The completion of the final review of the Greece's European Stability Mechanism (ESM) programme paves the way for a successful exit from the ESM programme on 20 August 2018. The accompanying debt measures improve general government debt sustainability.

rating action

Upgraded: Andorra to 'BBB+'; Outlook Stable

We expect a slightly higher deficit at the central government level compared with the government's 2018 budget. At the general government level, we expect the surplus of 1.0% of GDP in 2018 will decline to 0.7% by 2020 due to lower surpluses in the social security sector.

rating action

Affirmed: Slovenia at 'A-'; Outlook Stable

Real GDP growth is coming off a cyclical upswing and is forecast by Fitch to slow to 4.4% in 2018 and 3.1% in 2019, from 5.0% in 2017. Higher wages and positive near-term labour employment will support household consumption.

Global Sovereign Conference

Join us for our Global Sovereign Conference in one of our four locations. Our analysts will address whether the postiive EM cycle is over or not and looking beyond peak growth.

Frankfurt: Tuesday, September 4, 2018

New York: Thursday, September 6, 2018

Hong Kong: Tuesday, September 11, 2018

Singapore: Thursday, September 13, 2018

Project Syndicate Commentary

Fitch Ratings' Global Head of Sovereigns on The Trump Administration’s Dead End on Trade

There is every reason to believe that the United States’ trade dispute with China will get worse before it gets better, and that the US trade deficit will widen further rather than shrink, says Global Head of Sovereigns James McCormack.

RTHK Radio 3

Jeremy Zook Discusses Pakistan's Economic Outlook

Jeremy Zook, Associate Director of APAC Sovereigns, talks about Pakistan's economic policies and challenges after election of Imran Khan on Money Talk, RTHK Radio 3.

rating action

Germany Affirmed at 'AAA'; Outlook Stable

Challenging coalition dynamics weaken economic reform prospects, but we continue to expect broad continuity in macroeconomic policy. Recent strains in the relationship between CDU and its Bavarian sister party CSU over asylum policy represented an early setback to the cohesion of the new government.

rating action

Upgraded: Czech Republic to 'AA-'; Outlook Stable

General government surpluses are forecast throughout the forecast period with only a moderate decline to 0.8% of GDP in 2020 from 1.5% in 2018. While public finances have been supported by strong cyclical tailwinds, cautious fiscal policy-making has also contributed to the improvement.

rating action

Malta Affirmed at 'A+'; Outlook Stable

Fitch forecasts Malta will maintain a fiscal surplus of 1% of GDP in 2018, after outperforming its fiscal target by 3.1pp in 2017 with a surplus of 3.9% of GDP due to large tax revenues and proceeds from the Individual Investor Programme (IIP) and lower than expected capital expenditure.

rating action

Affirmed: Egypt at 'B'; Outlook Positive

Egypt's ratings are supported by progress in implementing an economic and fiscal reform programme, greater macroeconomic stability and improving external finances, while the ratings are constrained by large fiscal deficits, high general government debt/GDP, and weak governance scores (as measured by the World Bank governance indicators).

rating action

Fitch Affirms Brazil at 'BB-'; Outlook Stable

Brazil is experiencing a mild economic recovery in 2018, with the economy expected to grow by 1.5% in 2018 (below the current 'BB' median of 3.5%). Brazil's fiscal deficits remain large and are expected to decline only gradually, increasing its vulnerability to shocks.

Video Roundtable

China and the Global Economy - July 2018

Brian Coulton, Chief Economist & Andrew Fennell, Director of Asia Sovereigns, focus on trade protectionism and its potential impact on the global economy in a video roundtable hosted by Charles Seville, Co-head of America Sovereigns. Chaptered.

Trade War Escalation Would Knock 0.4% off World Growth

An escalation of global trade tensions that results in new tariffs on USD2 trillion in global trade flows would reduce world growth by 0.4% in 2019 to 2.8%. The US, Canada, and Mexico would be the most affected countries.

 

Related: Credit Hotspot: Trade Protectionism

Special Report

LATAM Sovereign Risks, Vulnerabilities Have Risen

Tightening external financing conditions, idiosyncratic domestic risks and global trade protectionism are likely to continue challenging Latin American and Caribbean sovereigns in second-half 2018. 

Viking Tour 2018 Credit Conference

Fitch analysts discuss the current and future credit issues at the 2018 Viking Tour. The events included presentations on key current and future credit issues by senior analysts from Fitch’s Sovereign, Financial Institutions, Covered Bonds and Corporate team as well as BMI Research.

rating action

Turkey Downgraded to 'BB'; Outlook Negative

Fitch believes downside risks to macroeconomic stability have intensified owing to the widening in the current account deficit, more challenging global external financing environment, jump in inflation and the impact of the plunge in the exchange rate on the private sector, which has significant foreign currency-denominated debt.

rating action

Affirmed: Spain at 'A-'; Outlook Stable

Spain's 'A-' rating is supported by a high value-added and diversified economy, extremely low average yield at issuance of 0.76% and negligible share of foreign currency debt. The rating also reflects strong, relatively broad-based economic recovery alongside ongoing reduction in macroeconomic imbalances.

Rating Action

Fitch Upgrades Mongolia to 'B'; Outlook Stable

The upgrade of Mongolia's IDR reflects ongoing improvements to fiscal and external metrics and progress in meeting key IMF programme targets. 
 

Pakistan Has Limited Window to Address External Risks

Pakistan's declining foreign exchange reserves and widening current account deficit are adding to the country's external financing risks. Further and considerable policy efforts would be required to stabilise the external position, and a new government has limited time to act after the 25 July elections, as external debt obligations will pick up more rapidly in 2019, says Fitch Ratings.

Mexico Election May Signal Fiscal, Energy Policy Shifts

Andres Manuel Lopez Obrador's victory in Mexico's presidential election could signal fiscal, economic and energy policy shifts, although the extent of change under the new government's policy and Congress remains uncertain. This uncertainty could weigh on investment until greater clarity emerges on the administration's policy orientation.
 

Contacts

James McCormack

Global

James McCormack

Analytical Group Head

+44 20 3530 1286

Tony Stringer

Global

Tony Stringer

Analytical Chief Operating Officer

+44 20 3530 1219

Jose Santos

Global

Jose Santos

Business Group Head

+34 93 323 9044

Brian Coulton

Economics

Brian Coulton

Analytical

+44 20 3530 1140

Sing Chan Ng

APAC

Sing Chan Ng

Business

+65 6796 7210

Stephen Schwartz

APAC

Stephen Schwartz

Analytical

+852 2263 9938

Ed Parker

EMEA

Ed Parker

Analytical

+44 20 3530 1176

Claire Dopson

EMEA

Claire Dopson

Business

+44 203 530 1405

Paul Gamble

Emerging Europe

Paul Gamble

Analytical

+44 20 3530 1623

Jan Friederich

Middle East & Africa

Jan Friederich

Analytical

+852 2263 9910

Shelly Shetty

Latin America

Shelly Shetty

Analytical

+1 212 908 0324

Diego Alcazar

Latin America

Diego Alcazar

Business

+1 212 908 0396

Charles Seville

North America

Charles Seville

Analytical

+1 212 908 0277

Michele Napolitano

Western Europe

Michele Napolitano

Analytical

+44 20 3530 1623

Arnaud Louis

Global

Arnaud Louis

Analytical

Supranationals

+33 144 299 142