SYDNEY, Nov. 29 (Xinhua) -- Potentially higher interest costs and volatile foreign exchange rates pose top credit risks for the Asia-Pacific in the coming year, according to credit ratings provider S&P Global Ratings in an annual year-end report.
Uncertainty about the policies of U.S. President-elect Donald Trump's administration is dominating financial markets, the group said in a Melbourne media release for its annual report.
"Rising U.S. stock markets, a sell-off in global debt markets, and the significant strengthening of the U.S. dollar show that markets are already testing a scenario that incorporates key features of Trump's campaign: fiscal stimulus through increased infrastructure spending and tax cuts; rising inflation; and a tightening monetary policy. The latter two may lead to higher interest rates," it said.
In the Asia-Pacific, "investors are in particular concerned about the trade policy the future U.S. government may adopt. Such a 'what if' scenario may hurt ... auto, consumer goods, infrastructure and technology sectors the most", S&P Global Ratings credit analyst Terry Chan said in the release.
"Notwithstanding the uncertainty, Asia-Pacific's economic growth appears to be steadying," the ratings provider said.
A "reasonably firm pick-up in macro momentum indicators is occurring", with retail sales offering "the clearest sign of a pick-up", it said. "This stems from rising incomes, which, in turn, is part of the region's evolving growth dynamics, with consumption playing a larger role."
