Moody’s offers bleak outlook for government debt amid political instability

  • In a report published Monday, Moody’s said political and geopolitical turbulence is exacerbating a gradual slowdown in trend GDP growth, aggravating structural bottlenecks and increasing the risk of economic or financial shocks.

  • Moody’s identified the emergence of influential “populist” movements and suggested this is undermining the effectiveness of domestic policy, weakening institutional strength and compounding social and governance risks.

  • “Overall, the global environment is becoming less predictable for the 142 sovereigns we rate, encompassing $63.2 trillion in debt outstanding,” the report said.

Ratings agency Moody’s has issued a negative outlook for sovereign creditworthiness in 2020, citing a “disruptive and unpredictable” political environment.

In a report published Monday, Moody’s said political and geopolitical turbulence is exacerbating a gradual slowdown in trend GDP (gross domestic product) growth, aggravating structural bottlenecks and increasing the risk of economic or financial shocks. This is likely to further threaten the security of government debt around the world.

Moody’s highlights the U.S.-China trade war as the starkest manifestation of the impact of geopolitical tensions.

“The antagonistic political environment is also weakening global and national institutions, lowering the shock-absorption capacity of sovereigns with high debt burdens and low fiscal buffers,” the report said.

www.cnbc.com/2019/11/11/moodys-bleak-outlook-for-government-debt-amid-political-instability.html

233 views