Fixed Interests

Stephen Schwartz, Head of APAC Sovereign Ratings and Thomas Rookmaaker, Director and Lead Analyst for Indonesia, discuss the economic impact of the Coronavirus in Indonesia, the fiscal and monetary policy responses and long term growth prospect.

The pandemic has had a heavy impact on SSA ratings. Jan Friederich, Head of Middle East & Africa Sovereign Rating, and Jermaine Leonard, Director, discuss the impact on sovereign ratings, the oil price shock, financing pressures and the G20 DSSI.

Climate change is a huge topic of political, social and financial market discourse.  Ed Parker, Head of Fitch’s EMEA Sovereign Ratings, and Tony Stringer, a Managing Director in the Sovereigns Group, discuss the main types of climate change risks, the uncertainties involved and the impact on sovereign ratings.

In the latest edition of Fixed Interests Shelly Shetty, Managing Director, and Kelli Bissett-Tom, Director and primary analyst for Peru, discuss the recent downgrade of Peru’s Local Currency IDR and its equalization with the Foreign Currency IDR which was also affirmed with a Stable Outlook. They examine the challenges ahead for Peru’s economic and fiscal profiles amid the coronavirus pandemic and an impending election cycle.

Nigeria faces significant challenges from the pandemic shock. Jan Friederich, Head of Middle East & Africa Sovereign Rating, and Mahmoud Harb, Director, discuss ongoing pressures on Nigeria’s external finances, its funding plan and growth outlook.

Forecasts cut again, but global economy close to bottoming out. Tony Stringer, Chief Operating Officer, Sovereigns and Brian Coulton, Chief Economist, discuss Fitch’s Global Economic Outlook - Crisis Update, May 2020

The GCC has been severely impacted by the global coronavirus pandemic. In this podcast, Jan Friederich, Head of Middle East and Africa Sovereign Ratings, and Krisjanis Krustins, Director and GCC Sovereigns analyst, discuss how sharply lower oil prices and the coronavirus crisis affect GCC sovereign ratings and currency pegs.

Shelly Shetty, Co-Head of Sovereigns-Americas, and Charles Seville, Senior Director, Americas Sovereigns, discuss Mexico’s rating downgrade, our main rationale behind our rating action and our overall views on how Mexico is placed to face the current difficult circumstances of global recession, including the contraction of the U.S., lower oil prices, coronavirus impact and other potential hits. What are the main drivers of Mexico’s economic recession? How will Mexico respond to the external shocks, and what’s ahead?

The lockdown on Wuhan has been lifted and China’s economy is recovering gradually. Stephen Schwartz and Andrew Fennell of APAC Sovereign Ratings, discuss China’s economic prospects, the course of policies, and implications for the sovereign rating.

Global GDP is collapsing as the COVID-19 crisis escalates rapidly. Tony Stringer, Chief Operating Officer, Sovereigns and Brian Coulton, Chief Economist, discuss Fitch’s latest Global Economic Outlook - Crisis Update.

With the coronavirus crisis taking an extraordinarily heavy toll on the world economy, Tony Stringer, Chief Operating Officer, Sovereigns and Brian Coulton, Chief Economist, discuss the latest Global Economic Outlook forecasts and downside scenarios.

In the latest edition of Fixed Interests, Michele Napolitano, Head of the Western Europe team, and Alex Muscatelli, from the Western Europe team and Primary Analyst for Ireland, discuss the implications of Ireland’s recent election for our analysis, and the outcome of our recent rating review of Ireland.

What are the economic and political implications of the recent social protests in Chile and Colombia, and what does the future hold? In the latest edition of Fixed Interests, Shelly Shetty, Co-Head of Sovereigns-Americas and Richard Francis, Director of Sovereign Ratings and Primary Analyst for Colombia and Chile, discuss how the aftershocks of the recent social unrest impacted the growth outlook and political profile of each of the countries. The overall impact was much more profound in Chile, leading Fitch to significantly revise its previous baseline growth and fiscal forecasts. In contrast, the impact on Colombia’s growth was relatively benign but there were some negative fiscal implications, an area where Fitch already had concerns given the rise in debt to GDP over the past five years. Despite the recent fall in the intensity of the protests, risks and uncertainties remain.

Sovereigns in the Commonwealth of Independent States (CIS) and Black Sea Region have experienced positive rating momentum recently, with four upgrades in 2019. Paul Gamble, Head of Emerging Europe Sovereign Ratings, and Erich Arispe, Senior Director on the Sovereign team, discuss the factors behind the improvement in the regions rating, and why Fitch believes that further upgrades may be tougher to achieve.

Asia’s Frontier Markets have great potential, but are also prone to external financing pressures. Stephen Schwartz, Head of Asia-Pacific Sovereign Ratings, moderates a discussion with Sagarika Chandra and Jeremy Zook, Associate Directors on the Sovereigns team, to discuss the ratings outlook for Sri Lanka, Pakistan and Vietnam. Sagarika explains the rationale for the recent revision of Sri Lanka’s outlook to negative, in contrast to Vietnam’s positive outlook. Jeremy discusses progress being made to strengthen Pakistan’s public and external finances, and what it would take for Pakistan’s rating to move higher.

The relative stability of the service sector - which accounts for 70% of GDP in the advanced economies – should help global growth to stabilise next year after a sharp leg down in 2019. Manufacturing has been hit much harder by the trade war, the related decline in business investment and the broader emerging market slowdown and we do not expect any rebound, even if signs are emerging that the downturn maybe starting to ease. Service sector output is much more closely tied to consumer spending, where tight labour markets and solid household income growth are supporting steady growth.

Demographic trends such as declining or rapidly expanding populations, a bulging youth cohort or pronounced ageing can create risks to sovereign creditworthiness. Key channels of impact include stagnant potential GDP growth, unsustainable pension systems and public debt, and risks to social and political stability. Demographic forces are already affecting some sovereign ratings and Fitch Ratings believes they are likely to become a more important driver over the medium term.

What are the implications of Argentina’s most recent presidential election, and how will it affect the nation’s current economic uncertainty? In the latest edition of Fixed Interests, Shelly Shetty, Co-Head of Sovereigns-Americas and Todd Martinez, Primary Analyst for Argentina, discuss President-elect Alberto Fernandez’s potential fiscal policies to help stem inflation, the pending renegotiation of the IMF program, and necessary debt restructuring to avoid default and establish a sustainable financial position.

World growth forecasts have been cut across the board following the escalation in the US-China trade war in August. We now expect world growth in 2020 to fall to 2.5% , the lowest rate since 2012. Trade policy disruptions will adversely affect exports, manufacturing and business investment and there are limits as to how effective monetary policy easing will be in softening the blow.

James McCormack, Head of Sovereign Ratings and Stephen Schwartz, Head of Asia-Pacific Sovereign Ratings, provide a preview of key issues that will be discussed at Fitch’s Global Sovereign Conferences taking place in Asia, Europe and the U.S. during the weeks of September 9th and 16th. Issues include the growth implications of the China-US trade war, and policy space across Asia for stimulus, if required, in light of risks to the growth outlook. Check out the events page on Fitchratings.com for more information and conference registration.