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Sovereigns

Global Home > Sovereigns

Poland's Government Faces Greater Fiscal Challenge in Second Term

Poland's ruling Law and Justice (PiS) party may find it harder to avoid fiscal slippage in its second term as the economy slows and the boost from tax collection enhancements recedes.

Malaysia Budget Balances Consolidation with Growth Measures

Malaysia's 2020 budget contains modest fiscal easing of the deficit target in response to increased economic growth risks, but does not represent a significant shift in the government's consolidation efforts.

webinar

Russia Sovereign Credit Outlook

Available On-Demand

Fitch Ratings hosted a webinar with Erich Arispe, primary analyst on Russia; Paul Gamble, Head of Emerging Europe Sovereigns; and Alexander Danilov, Head of Russia Banks.

Japan Consumption Tax Rise Helps Medium-Term Fiscal Consolidation

Japan's consumption tax hike supports medium-term fiscal consolidation efforts, and the country's sovereign credit profile. It will lower Japan's debt ratio; however, very high public debt will remain a key credit weakness.

 

RelatedJapan Consumption Tax Rise Helps Medium-Term Fiscal Consolidation

Why do we maintain the United States’ AAA rating?

Fitch Ratings recently completed its Global Sovereign Conference series covering 8 markets around the world. Our sovereign analysts from around the world gathered together to discuss the key issues and themes impacting the industry.

 

View More:
The Rating Watch Negative on the United Kingdom
Overview on the Asia-Pacific Sovereign Ratings
Why did we downgrade Hong Kong?

Events

In Conversation: Sovereign Ratings and the Global Economic Outlook

October 19, 8:00am – 9:30am

Please join us on Saturday morning in Washington D.C. on October 19th for a breakfast discussion at the St. Regis Hotel during the time of the IMF Meetings. 
 

Register Now

Webinar: Fitch Downgrades Saudi Arabia to 'A'; Outlook Stable

Following our recent downgrade of the Saudi Arabia sovereign rating to ‘A’, Fitch Ratings hosted a webinar to explain the background to the decision and discuss the drivers for Saudi Arabia’s ratings and regional trends.

Listen Now

Podcast

Fixed Interests: Global Economic Outlook

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.

Germany's Outsized Export Dependence a Growth Risk

Germany's heavy dependence on exports means that the slump in world trade and manufacturing has taken a much heavier toll on growth than in other G7 economies. The contribution of gross export demand to German GDP growth has fallen very sharply over the last two years - as highlighted in Fitch's economics team's latest Chart of the Month - and has left the economy on the brink of recession.

rating action

Fitch Downgrades Saudi Arabia to 'A'; Outlook Stable

Fitch Ratings has downgraded Saudi Arabia's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'A' from 'A+'. The Outlook is Stable.

India Tax Cuts May Bolster Growth Eventually; Fiscal Impact Comes Sooner

The cuts, announced by Finance Minister Nirmala Sitharaman on 20 September, will lower the base corporate tax rate to 22% from 30% for companies that do not seek exemptions, and reduce the rate for some new manufacturing companies to 15% from 25%.

Special Report

U.S. Fiscal Weakening Could Hit Public Finance, Financial Credits

Low borrowing costs have helped to temper political concerns over rising federal deficits and debt in recent years. However, Fitch Ratings believes that public finances could emerge as a greater issue for U.S. policymakers if borrowing costs rise or if the deficit increases sharply during a future downturn.
 

Full ReportThe Coming Storm: Effects of U.S. Fiscal Deterioration on Key Sectors

Commodities and Trade Stress Latin America’s Vulnerability to China

Heavy commodity dependence and direct trade exposures represent significant vulnerabilities for Latin American economies if China's slowdown is sharper than expected, according to Fitch Ratings.

GCC Broader Public Sector Debt Poses Fiscal Risks

Government-related entity (GRE) debt is a significant and growing contingent liability for some governments of the Gulf Cooperation Council (GCC). The high public sector debt reflects heavy state involvement in the economy and the use of GREs as a key tool of economic policy. 

Bloomberg TV

Why Did Fitch Downgrade Hong Kong for First Time Since 1995?

Andrew Fennell, director and lead analyst for Hong Kong and China at Fitch Ratings, explains why the agency has downgraded the city as an issuer of long-term, foreign currency debt for the first time since 1995.


Related:
Fitch Downgrades Hong Kong to 'AA' from 'AA+'; Outlook Negative

Fitch Ratings Releases Interactive Sovereign Rating Model

Fitch Ratings has launched an interactive version of the proprietary Sovereign Rating Model (SRM) that sits at the centre of our Sovereign Rating Criteria. The interactive SRM will enable users of our ratings to input their own forecast assumptions across the range of quantitative variables that comprise the SRM.
 

View model landing page or read press release

 

Related Webinar: New Interactive Sovereign Rating Model Sessions 

Session 1: Listen  Now
Session 2: Listen Now

APAC Sovereigns Mostly Stable in the Face of Rising Growth Risk

The balance of risks for APAC sovereign credit profiles has shifted towards weaker global growth and away from global financial conditions. Nineteen of our 20 sovereign ratings in the region are on Stable or Positive Outlooks, reflecting the cushion provided by strong fiscal and external buffers and shock-absorbers from flexible policy frameworks.

rating action

Congo Affirmed at 'CCC'

Congo's ratings are supported by improved liquidity due to oil-related twin surpluses and a tighter policy framework under the new IMF programme. They are weighed down by strong implementation risks to the IMF programme, limited funding options, high albeit declining public debt, weak public financial management illustrated by two recent defaults, high dependence on the oil sector and low governance indicators.

rating action

Fitch Upgrades Ukraine to 'B'; Outlook Positive

Ukraine has demonstrated timely access to fiscal and external financing, improving macroeconomic stability and declining public indebtedness, while a shortened electoral period has reduced domestic political uncertainty. Expected macroeconomic policy continuity, the new government's strong stated commitment to structural reforms and engagement with IFIs mean that Fitch expects further improvements in creditworthiness.

rating action

Affirmed: Luxembourg at 'AAA'; Outlook Stable

Luxembourg's ratings reflect its high income per capita, strong governance indicators and sound public finances, which outweigh higher macroeconomic volatility due to its ultra-openness and heavy reliance on the financial services sector.

rating action

Fitch Affirms Kazakhstan at 'BBB'; Outlook Stable

Kazakhstan's 'BBB' IDRs balance strong public and external balance sheets, underpinned by large government savings and a substantial sovereign net foreign asset position, against high commodity dependence, a weak banking sector, and lower World Bank governance indicators and GDP per capita than the 'BBB' median and higher inflation than peers.

UK Political Volatility Means Risk of No-Deal Brexit Is Still Significant

A 'no-deal' Brexit remains a significant risk due to UK political volatility, despite manoeuvres in parliament to try to prevent it. The nature and timing of the UK's exit from the European Union remain uncertain, and the risk that a no-deal departure causes substantial disruption to UK economic prospects is reflected in the Rating Watch Negative (RWN) on the UK's 'AA' sovereign rating.

Demographic Risks on the Rise for Sovereign Ratings

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.

Commodities, Trade Links Underscore LATAM's China Vulnerability

Heavy commodity dependence and direct trade exposures represent significant vulnerabilities for Latin American economies if China's slowdown is sharper than expected.

Korea Has Fiscal Space, but Medium Term a Challenge

The 2020 budget announced on 29 August aims to respond to sluggish economic prospects stemming from the global growth slowdown, the US-China 'trade war', and trade tensions with Japan.

rating action

Fitch Downgrades Argentina to 'RD'

The downgrade of Argentina's ratings to 'RD' follows the government's unilateral extension of repayment on certain debt obligations effective August 30, specifically short-term T-bill instruments issued under local law and denominated in USD and pesos. In accordance with its criteria, Fitch believes Argentina is in default on its sovereign obligations and that this development constitutes a 'distressed debt exchange'.

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