Downside Risks And Intra-Region Divergence

January 2008 | Sovereign Risk Rating

As we begin 2008, there are three main risks to our Sovereign Risk Ratings for Asia. The first is a US-led global economic slowdown. The second is ongoing political uncertainty in several states. The third is inflationary pressures brought about by high oil and soft commodity prices. Thus, our generally solid ratings have come under slight pressure and are also showing signs of greater intra-regional divergence, owing to contrasting macroeconomic and political outlooks. The only risers have been China, the Philippines, and Thailand, each of which saw strong currency appreciation in 2007 - and are likely to again in 2008

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