Asia-Pacific economies will be adversely affected if another major global economic shock materializes, Standard and Poor's said in a report on Tuesday.
"Asia-Pacific economies would inevitably feel the impact if another major economic or financial shock materializes," the rating firm said in the report titled "Asia-Pacific Sovereigns: Mixed Outlook In An Uncertain Year."
The experience of 2008-2009 showed that deepening regional trade does not offer a strong shield against a sharp recession in the developed economies, the report added.
S&P credit analyst Kim Eng Tan said the global growth outlook, external funding pressures, domestic political issues, and unexpected changes in policy or economic environments can put pressure on ratings.
Tan noted that the region could benefit from another Chinese stimulus if a new shock hits, but it may not come quite as strongly or quickly as some may hope due to domestic political reasons in the country.
"If another global recession occurs, we expect it to have the strongest downward pressure on sovereign creditworthiness in Japan and Vietnam, where the outlooks on the long-term ratings are already negative," S&P said.
by RTT Staff Writer
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