Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s (S&P), took more negative adjustments than positive ones on local companies this year, but it expects the situation to improve next year amid a brighter global economy.
While growth in China may continue to slow, with its GDP growth forecast at 7.4 percent next year from an estimated 7.6 percent this year, the eurozone is emerging from recession and the recovery in the US is gathering momentum, Taipei-based credit analyst Patty Wang (王珮齡) said by telephone.
The landscape ahead is favorable for Taiwan’s export-reliant economy, with S&P forecasting that GDP growth will hit 3.5 percent next year, from a mild 2 percent this year, Wang said.
There were no defaults in Taiwan Ratings’ pool of companies this year, but overall rating outlooks showed a negative bias for the second straight year as Taiwanese exporters in commodity sectors, such as steel and chemicals, had difficulty selling products in the Chinese market, she said.
The financial sector held steady and was balanced in terms of credit profiles this year, excluding rating adjustments caused by criteria changes, she added.
Taiwan Ratings earlier made eight upgrades and one downgrade as well as 16 outlook revisions on domestic insurance companies in line with criteria changes.