Taiwan has been taken off a list of countries with a negative outlook for credit default risk, Coface, an international credit insurance and management services group, said in a statement yesterday.
The ratings company and export credit insurer made 20 upgrades to its latest country ratings, including Hong Kong and Taiwan, which was placed on a negative watch list last April, the Coface statement said.
“Asian economies will benefit from the rebound in international trade. This is especially true for an open economy like Taiwan. This is why we have withdrawn the negative watch on Taiwan’s A2 rating,” said Richard Burton, regional managing director at Coface. “However, attention will be focused on bubbles which may form or may already be forming, such as for asset prices, commodities and government debt.”
Coface said if the end of the credit crisis was confirmed, this year’s recovery in industrialized countries is at higher risk because of possible bubbles, especially public debt bubbles.
The company said the bursting of these bubbles would likely generate new negative shocks for companies.
“A relapse would affect companies, many of which are now considerably weakened after two years of under-activity,” it said.
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