Moody’s Investors Service says in a new report that the credit trend for Asia-Pacific companies will remain broadly stable through 2022, supported by smoother and more sustained global economic growth.

  • Vaccination progress and easing supply and demand pressures will boost growth across economies
  • Gaming and consumer services were among the most pressured sectors in 2021, while metals and mining had the most positive implications

“Significant progress on vaccination and the availability of booster shots have lessened the pandemic’s threat, allowing for more social and economic activities to normalize. Meanwhile, the global supply and demand equilibrium will likely be restored by stronger household spending, inventory restocking and suppliers’ efforts to address the supply bottlenecks in the last few quarters.”

Clara Lau, a Moody’s Senior Vice President and Group Credit Officer.

Moody’s estimates that the GDP growth of G-20 advanced and G-20 emerging economies will grow at 4.2% and 4.8%, respectively, in 2022. Fiscal policies across countries will shift from accommodative to strengthening long-term growth potential and debt sustainability.

And central banks will gradually tighten monetary policies and normalize interest rates to remove the liquidity support extended during the pandemic, without impeding growth.

The share of ratings with a stable outlook in Moody’s APAC corporate portfolio was around 81% at the end of 2021, higher than the 72% at the end of 2020. The share of ratings with negative implications (meaning a negative outlook or a review for downgrade) dropped to 16% at the end of 2021, lower than the 26% at the end of 2020.

Negative rating actions outpaced positive ones in 2021, with 124 negative actions compared with 65 positive actions. Chinese property developers accounted for 42% of all negative rating actions, because of the industry’s market and liquidity challenges.

Gaming and consumer services were also among the most pressured sectors, as pandemic restrictions to contain resurgences posed uncertainties to their recovery. Conversely, metals and mining had the most positive implications, on the back of rising commodity prices and demand from recovering economies.

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

Thailand raises interest rate for the third time in a row to 1.25%

For the third time in a row this year, the Bank of Thailand increased its benchmark interest rate by a quarter point to 1.25% on Wednesday, making it the highest level since February 2020 and helping to control inflation.

Fintech sector boosts inclusion and liquidity in emerging markets

Driven by a decline in cash payments during the Covid-19 pandemic, digital payments skyrocketed in line with the growth in e-commerce, as the financial technology (fintech) sector expanded to provide consumers with a wider variety of payment options.

Singapore’s UOB completes acquisition of Citigroup’s retail banking in Malaysia and Thailand

Once completed, the acquisition is expected to double UOB’s existing retail customer base in the four markets to 5.3 million customers and add 5,000 people to its team strength.