This chart from Moody’s Investor Services shows the sovereign credit ratings of countries in the Asia-Pacific region.
Debt issued by 14 nations is currently deemed to be of investment grade by Moody’s — including the highest rating of Aaa for Australia, New Zealand and Singapore — while 10 are rated Ba1 or lower, defined as “junk” status.
The higher the credit rating, the more creditworthy the nation is deemed to be.
Currently, Moody’s has two nations on watch positive for a ratings upgrade — Indonesia and Vietnam — while Sri Lanka is the only country that is on watch negative, implying a risk that its rating may be downgraded in the future.
The remaining 21 nations in this list currently carry a stable credit rating.
“Our outlook for sovereign creditworthiness in Asia Pacific (APAC) in 2018 is stable overall, reflecting our expectation for the fundamental credit conditions that will drive sovereign credit over the next 12 to 18 months,” Moody’s says.
“This favourable growth environment will amplify the credit benefits of past reforms and encourage some sovereigns to implement further measures, particularly in emerging markets.”
While a far stronger outcome than that seen in prior years, Moody’s says that leverage “remains a credit constraint”.
“Government debt is high for frontier markets and Japan, while corporate and household debt poses broad contingent liability risks for emerging markets and advanced economies, respectively,” it says.