Fitch Ratings said its outlook for Asia-Pacific (APAC) sovereign ratings has been downgraded to “deteriorating” from “neutral,” citing risks to the region’s economic conditions following the disruptions posed by the fighting in the Middle East. Fitch said the change resulted from its mid-year update, as reported by BusinessWorld.
The rating agency warned that a prolonged oil crisis could further strain the region’s economies, particularly net oil importers like the Philippines. Higher energy costs may exacerbate inflation and fiscal pressures, potentially affecting credit metrics and growth prospects.
Fitch had issued the “neutral” call late last year, and the latest revision reflects escalating geopolitical risks and their economic spillovers. The outlook change applies to a range of sovereign ratings in the APAC region, with the possibility of further downgrades if conditions worsen.