NEW YORK--(BUSINESS WIRE)--The latest edition of Fitch Ratings' 'Inside Credit' newsletter highlights the largest risks to the agency's credit ratings portfolio. A sharp slowdown in China's economy would have the greatest impact across a broad range of issuers, according to Fitch's Risk Radar.
Fitch's base case is for a gradual slowdown, but equity market volatility and yuan devaluation highlight the economic adjustment and deleveraging challenges China is facing.
"If China's GDP growth fell to 2% by end-2017, many emerging markets would face a more severe and prolonged slowdown," says Eileen Fahey, Chief Credit Officer. "A number of factors including recessions in Russia and Brazil, lower commodity prices, and a strong U.S. dollar make it a fairly urgent risk for emerging markets."
Other risks addressed in the Risk Radar include persistently low oil prices, U.S. interest rates, Eurozone deflation and zero growth, U.S. medium-term fiscal challenges and North American consumer capacity.
Other topics covered in this week's edition of Inside Credit include:
- Ukraine Downgraded to 'Restricted Default'
- EU Bank Resolution Paths Diverge, Coordination Important
- European Funds Face Shrinking Market Liquidity, Capacity Issues
- GSII Capital Rules Deter Insurers from Greater Complexity
- Higher-Rated Issuers Gain from Change in China's Offshore Debt Policy
- TPP Would Set Key Precedents for Global Integration
- Lower Russian Bank Capital Ratio Would Be Credit Negative
- Video: Fitch in Brazil
'Inside Credit' is a weekly snapshot of Fitch Ratings' noteworthy content, selected from all sectors and regions. To receive the weekly edition, distributed every Friday at 8am ET, please sign up here:
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Additional information is available at 'www.fitchratings.com'.
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