JOHANNESBURG – Rating agency Moody’s has singled out Britain, Hong Kong, Argentina and South Africa as countries that needed continued monitoring amid geopolitical developments.
In a report issued on Tuesday, Moody’s pointed to the four countries, charging that the global environment had become less predictable for its 142 sovereign rates, encompassing $63.2 trillion (R940trln) in outstanding debt.
The agency said an increasingly antagonistic political environment was undermining growth, weakening global and national institutions and reducing resilience to shocks.
Moody’s revised its global sovereign outlook to negative from stable for 2020, highlighting that the slowdown in growth had worsened due to increasing populism and trade tensions. It said trade wars and geopolitical risk would weaken open economies by lowering investment and economic activity.
“The antagonistic political environment is also weakening the shock-absorption capacity of sovereigns with high debt levels and low fiscal buffers,” said Jaime Reusche, Moody’s vice-president and co-author of the report. “For some, it is also weighing on institutional strength, with policymakers increasingly constrained.”