Moody’s cuts 2020 global sovereign outlook to ‘negative’

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Nov 13, 2019 06:00 am

LONDON: Rating agency Moody's cut its global sovereign outlook for 2020 to "negative" from "stable" on Monday, saying disruptive and unpredictable world politics would slow growth and increase the risk of economic or financial shocks.

Moody's, which has already slapped downgrade warnings on Britain, South Africa, India, Mexico, Turkey and Hong Kong, said there were three main drivers behind the move.

Unpredictable politics and trade wars such as that between the United States and China would weaken open and commodity-exporting economies.

The increasingly antagonistic environment was also likely to damage global and national institutions, which together with lower growth, raises the probability of crises but reduces the capacity to deal with them.

"In an unpredictable environment, growth and credit risks are tilted to the downside," Moody's said in a report on the 142 countries it rates and their US$63.2 trillion (S$86 trillion) of sovereign debt.

"There are few silver linings, and a rising risk of more negative outcomes," it added.