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outlooks 2020

Service Sector Resilience to Help Global Growth Stabilise in 2020

The resilience of the service sector and consumer spending growth in the advanced economies should help global growth stabilise next year, after a sharp decline in 2019, says Fitch Ratings in its new Global Economic Outlook (GEO).

View all Outlooks: 

Credit Outlooks 2020
Global Economic Outlook

Webinar

Emerging Europe Sovereign Ratings: 2020 Outlook

December 19, 2019 at 14:00 GMT / 09:00 EST

Fitch Ratings is hosting a webinar with Paul Gamble, Head of Emerging Europe Sovereigns, and Ed Parker, Head of EMEA Sovereigns, to discuss the 2020 outlook for Emerging Europe Sovereigns. 

Register Now

Smoother Italy-EU Relations Do not Remove Fiscal Uncertainty

Italy's Draft Budgetary Plan (DBP) for 2020 and the European Commission's response confirm Fitch Ratings' view that the change of government in September has reduced the near-term risk that Italy disengages from EU fiscal rules and processes. However, it also highlights the likelihood of friction and the continuing absence of a credible longer-term strategy to reduce public debt in the face of weak real and nominal growth.

outlooks 2020

APAC Sovereign Outlook Stable despite Growth Challenges

December 11, 2019
4:00pm HKT

Join Fitch’s senior analysts from APAC Sovereign team to discuss the 2020 outlook - Financial buffers and policy easing help sustain growth in APAC.

Register Now

Related Reports

View all outlooks: Credit Outlooks 2020

Kuwait Political Disputes to Delay Debt Issuance, Reform

The Kuwaiti government's resignation and subsequent cabinet reshuffle point to political frictions that could delay new debt issuance and weigh on broader fiscal and economic reforms, Fitch Ratings says. Kuwait has been the slowest reformer in the Gulf Cooperation Council in recent years, partly due to these frictions and partly due to its exceptionally large sovereign assets, which could finance decades' worth of fiscal deficits.

Western Europe Sovereign Ratings- 2020 Outlook

Fitch Ratings hosted a webinar with Michele Napolitano, Head of Western Europe Sovereigns, and Ed Parker, Head of EMEA Sovereigns, to discuss the 2020 outlook for Western Europe Sovereigns.

Listen Now

outlooks 2020

Emerging Europe Sovereign Outlook Stable in 2020

Fitch Ratings has a Stable Outlook for sovereign credit ratings in emerging Europe in 2020 following a wave of upgrades in 2019. A weaker external environment will offset relatively buoyant domestic demand and test the recent improvement in public finances in CEE. Policy frameworks in the CIS will continue to evolve, with reform momentum appearing strong, most notably in several sub-investment-grade sovereigns.

outlooks 2020

Sub-Saharan Africa Sovereign Outlook Stable but Upward Debt Risk

Sovereigns in the SSA region largely absorbed the earlier commodity price shock, and will see median government debt decline in 2020 after a marginal reduction in 2019. However, weak PFM, persistent high-priority infrastructure needs and pressure for improved public services raise risks for debt trajectories. 

outlooks 2020

Fitch Ratings Sees Limited Debt Reduction in Western Europe

The prospect of low interest rates for longer and additional quantitative easing will support debt dynamics in western European sovereigns but also reduce pressure on governments to reduce debt levels and implement structural reforms.

Escaping Japanification Difficult for Eurozone If It Takes Root

The eurozone has some of the symptoms of 'Japanification', but not the full-blown condition. Critically, it has avoided outright price deflation - a key element of the experience in Japan. However, if Japanification were to become entrenched, it would leave the eurozone more vulnerable to pernicious debt deflation, prolonged stagnation, rapidly rising government debt ratios and sovereign rating downgrades

FTEurozone at risk of Japan-style stagnation, Fitch warns

Fixed Interests Podcast: Demographic trends

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.

The Cost to Sovereigns of Support for Supranationals

The cost of support to supranational entities for their controlling sovereigns is overall limited relative to GDP. On average, legally binding obligations, which constitute contingent liabilities, represent 1.4% of GDP. However, for some emerging countries, these commitments are much larger. 

outlooks 2020

Oil and Politics Risks to Stable MENA Sovereign Outlook

Outlooks are mostly stable on sovereign ratings in the Middle East North Africa Region (MENA), but renewed weakness in oil prices and regional and domestic political developments continue to pose a downside risk to ratings in 2020.

Outlooks 2020

2020 North American Sovereign Outlook Stable despite Fiscal Pressures

Fitch Ratings expects North American sovereign ratings to be stable in 2020. Both the U.S. and Canada are rated 'AAA' with a Stable Outlook.

Sovereign Wealth Funds Key to High GCC Ratings

The sovereign wealth funds (SWFs) of Abu Dhabi, Kuwait and Qatar provide two-to-five notches of uplift to their sovereign ratings, Fitch Ratings says in a new report on SWFs in the Gulf Cooperation Council (GCC).

Aramco IPO Funds May Help Offset Fresh Saudi Austerity Push

Saudi Aramco's IPO will have little direct fiscal effect, but could help offset the economic impact of renewed government austerity measures by allowing the Public Investment Fund (PIF) to boost domestic investments, Fitch Ratings says.

Outlooks 2020

Latin American Sovereigns Face Persistent Rating Pressure

Downward rating pressures will persist in 2020 for Latin American sovereigns, Fitch Ratings says, with seven of 19 on Negative Outlook compared with five (plus one on Rating Watch Negative) at end-2018. 

rating action

Fitch Affirms Egypt at 'B+'; Outlook Stable

Fitch Ratings has affirmed Egypt's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.

Kenya Loan Rate Cap Repeal Positive for Banks, Supports Growth

The repeal of Kenya's lending rate cap is positive for the country's banks as it will boost profitability, but loan margins are unlikely to return to pre-cap levels, Fitch Ratings says. It will also support economic growth through supporting a modest rebound in lending and improving monetary policy transmission.

Webinar

Ukraine: Post-Election Opportunities & Challenges

11/25/2019 at 9:30 AM (EST) | 2:30 PM (GMT) 

Fitch Ratings is hosting a webinar with Erich Arispe, primary analyst on Ukraine, and Paul Gamble, Head of Emerging Europe Sovereigns, to discuss the opportunities and challenges in Ukraine.

Register Now

Global Sovereigns Outlook 2020

Global sovereigns enter 2020 with the world economy slowing and policymakers debating what to do about it. Most countries are exposed to the trade dispute between China and the US, making it more difficult to calibrate domestic policy settings given the international uncertainties.

 

Download the Global Sovereigns Outlook to learn more

rating action

Fitch Affirms China at 'A+'; Outlook Stable

China's ratings are supported by the country's robust external finances, strong macroeconomic performance, and size as the world's second-largest economy. The ratings are primarily constrained by large structural vulnerabilities in the financial sector, relatively low per capita income, and weaker governance metrics than those of 'A' rated peers.

Political Risk An Acute Issue for Latin American Sovereign Ratings

Recent political volatility in a number of Latin American countries, including Argentina, Bolivia, Chile, Ecuador and Peru, reflects a broader theme of rising political risk that could amplify negative sovereign credit trends in the regions. There are currently no positive Ratings Outlooks among Latin American sovereigns and a large number of Negative Outlooks.

Fiscal Policy Easing Ahead in 2020

Global sovereigns enter 2020 with the world economy slowing and policymakers debating what to do about it, says Fitch Ratings. Most countries are exposed to the trade dispute between China and the US, making it more difficult to calibrate domestic policy settings given the international uncertainties. 

Path to Spanish Political Stability Remains Uncertain

The preliminary coalition agreement between Spain's Socialist Party (PSOE) and Unidas Podemos (UP) supports our view that election fatigue will incentivise politicians to form a government. However, the path to forming a lasting majority government remains challenging.

Election Pledges Heighten UK Fiscal Risks

Spending plans from the two largest UK political parties suggest that the period of budget deficit reduction is over, Fitch Ratings says. We anticipated fiscal loosening when we affirmed the UK's 'AA' sovereign rating in October but, while the scale and timing remains uncertain, risks to our fiscal projections have risen substantially.

Fitch Affirms Bahrain at 'BB-'; Outlook Stable

Bahrain's ratings are supported by strong financial backing from richer neighbours in the GCC, a large and developed financial sector and high GDP per capita and human development indicators relative even to the 'BBB' median. Weak public finances, high fiscal dependence on oil revenue and political constraints all weigh on the ratings

Fitch Revises Cote d'Ivoire's Outlook to Positive; Affirms at 'B+'

Cote d'Ivoire's economy continues to show resilience and stability despite the worsening external backdrop. The government's continued adherence to fiscal prudence sets Cote d'Ivoire on track for general government debt to stabilise well below the current 'B' median over the medium term.

rating action

Fitch Upgrades Mozambique to 'CCC'

Fitch Ratings has upgraded Mozambique's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'RD' and Long-Term Local-Currency IDR to 'CCC' from 'CC'.

Webinar

Chilean Unrest: Challenges Ahead

On Demand

Join us for a webinar with the Latin America Ratings Group to discuss Chile’s ratings and the risks the protests pose to economic growth, the fiscal deficit and debt trajectory, and President Piñera’s reform agenda as well as the corporate, bank and insurance sectors in the country.

Register Now

 

Related: Chilean Unrest Has Mixed Effect on Corporate, Sovereign Credit

Most GCC Budget Positions Weakening on Lower Oil Prices

Headline fiscal balances will weaken across much of the Gulf Cooperation Council (GCC) in 2019 and 2020, maintaining pressure on sovereign and external balance sheets, Fitch Ratings says. Last year's fiscal policy loosening has been exacerbated by lower oil prices.

20/20 Vision

Manufacturing and Labour Market Disconnect Persists in Advanced Economies

The contrast between labour market performance and manufacturing activity indicators in the advanced economies is persisting. There has been widespread further weakness in recent months in Manufacturing Purchasing Managers' indices across larger economies including eurozone, UK, Germany, Spain, Russia and South Africa.

Fitch Revises Turkey's Outlook to Stable; Affirms at 'BB-'

Fitch Ratings has revised the Outlook on Turkey's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative, and affirmed the IDR at 'BB-'. Turkey has continued to make progress in rebalancing and stabilising its economy, leading to an easing in downside risks since our previous review in July.

APAC Frontier Sovereigns Diverge; Vietnam Achieves Stable Growth

Diverging APAC frontier market sovereign ratings in recent years reflect Vietnam's lengthening record of macroeconomic stability while Mongolia, Sri Lanka and Pakistan have faced external vulnerabilities. Our Positive Outlook on Vietnam suggests this divergence could continue, notwithstanding the varying degrees of stabilisation seen in the other three sovereigns' credit profiles.

Argentina Debt Challenges Go Beyond Liquidity

Argentina's new president-elect, Alberto Fernandez, faces urgent policy challenges including turning vague campaign promises into a detailed economic plan, renegotiating the IMF Stand-by Arrangement, and restructuring debts with bondholders.

Related

South Africa's MTBPS Fails to Stabilise Government Debt

South Africa's Medium-Term Budget Policy Statement (MTBPS) does not outline a clear path to its stated objective of stabilising government debt/GDP by 2025/2026. Rising real primary expenditure underlines the difficulty of reining in the public sector wage bill and persistent social pressures for better services in the context of divisions within the governing ANC.

Quarterly Frontier Markets Recap

Frontier Market Newsletter - 3Q19

Fitch has just published the latest edition of our Frontier Markets Newsletter. In this issue, we look at financing constraints and institutional weaknesses. The newsletter references all of Fitch’s rating actions, commentary and research on Frontier Markets over the last quarter, as defined by the J.P. Morgan NEXGEM index. Access the newsletter.

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