Moody's "Despite US-China Agreement, Asian Companies Expected to Underperform... Auto Industry Most Negative"

[Asia Economy Reporter Son Sunhee] International credit rating agency Moody's forecasted on the 16th that despite the Phase 1 US-China trade agreement, ongoing uncertainties will negatively impact the credit conditions of companies in the Asia-Pacific region.

In the 'Asia-Pacific Non-Financial Corporates Outlook' report released that day, Moody's stated, "Due to continuing trade policy uncertainties and geopolitical conflicts this year, the overall credit conditions of non-financial corporates in the Asia-Pacific region will weaken."

It added, "Global economic growth will remain sluggish and lackluster as growth rates in the US and China slow down," forecasting, "This year, the US economic growth rate will decline to 1.7%, and China's economic growth rate will fall to around 5.8%."

While Moody's described the Phase 1 US-China trade agreement as positive, it expressed a negative outlook, saying, "Core differences between the two countries, especially disagreements over future technology competition, remain unresolved, so policy uncertainty will persist." It further noted, "Such uncertainty will continue to dampen corporate and investor sentiment, negatively affecting corporate earnings growth and profitability."

Moody's particularly forecasted, "The automotive sector will face the most negative pressure," explaining, "With economic growth slowing in major markets and global demand weak, emission regulations and investments in new technologies will impact financial and credit quality, weakening the credit ratings of some automobile companies."

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