COVID-19 aggravates credit conditions in Asia in 2020, according to Moody's
The new coronavirus will aggravate credit conditions in Asia in 2020, according to the risk rating agency Moody's, which foresees a negative situation for the region outside the COVID-19 epidemic.
"The coronavirus outbreak has added an additional decline to growth prospects at a time when economic growth trajectories across the region were already in decline," Moody's analyst Deborah Tan said in a statement.
The agency attributed its prognosis to the slowdown in growth, the continuing uncertainty of trade policies and political disputes, and warned that the effects may go beyond a "passing incident" by considering "likely that the causes are more structural than cyclical" .
Specifically, Moody's pointed to China's constant slowdown, demographic problems in Thailand or South Korea, a less stable geopolitical environment and the growing threat to multilateral trade relations.
Therefore, he said that "the probability that the risks crystallize in Asia has grown" and warned that lower growth will limit the options of the governments of the region to appease social tensions or increase political risks.
Moody's made the assessment one day after reviewing downward Chinese growth for 2020, which went from 5.8 to 5.2%, because of COVID-19, which he warned will have a "severe but short impact duration "in the rest of the region.
