Despite higher oil prices, rising interest rates and inflationary pressures, the credit quality of Asia's sovereign governments is continuing its favorable trajectory, Standard & Poor's Ratings Ser-vices said in a report released yesterday.
Of the 19 Asia-Pacific sov-ereigns rated by S&P, eight gar- nered a positive outlook and two a negative outlook, the report said.
Taiwan retained its "negative outlook" as cross-strait issues and domestic politics continued to cast a shadow on the country's prospects. It also retained its AA- rating for long-term local and foreign currency sovereign ratings and an A-1+ rating for short-term local and foreign currency ratings with negative outlook -- the same as the ratings given in February.
"Exports remain robust and help redress some of the negative sentiment around the ratings on this government. Besides the cross-strait issue, adversarial domestic politics continues to impede effective economic policies. Consequently, not too many economic policy initiatives can be expected," the report said of Taiwan.
The only negative rating action taken was on Sri Lanka, whose outlook was revised to negative because of the escalating military conflict, S&P said.
The outlook for Hong Kong and India was revised to positive from stable because of fiscal improvement. S&P also upgraded the outlook for Indonesia to positive from stable, and the Philippines to stable from negative.
S&P retained its growth forecasts for the region's economies at the levels set in February, with possible upside surprises, especially in China, India, Hong Kong, Mongolia and Singapore.