Taiwan's long-term credit was given an "A+" rating by Fitch Inc, which said the nation's high foreign reserves and low debt shield it from a potential cash shortage even as growth stalls.
The rating agency, which began coverage of Taiwan's sovereign debt today, gave the nation its fifth-highest rating, putting it on par with Kuwait.
Fitch said the outlook for the rating is "stable" as US$116 billion in reserves and foreign debt worth just 9 percent of GDP minimize the risk of a default.
Still, Taiwan's economy fell into recession in the third quarter, shrinking 4.2 percent from a year earlier, as exports tumbled. That has "exposed domestic weaknesses that constrain the island's creditworthiness," Fitch said.
Stalled world growth and shrinking demand for computers have slashed orders for Taiwan-made chips and other goods, causing exports -- which make up about half the economy -- to fall 29 percent in the third quarter from a year earlier. Domestic spending and investment aren't pulling their weight.
Non-performing loans could rise to as high as 15 percent of the total by the end of this year from about 11 percent at the end of September, Fitch said, making banks reluctant to lend and delaying an economic rebound.
Eleven interest-rate cuts since last December haven't been enough to get companies spending -- corporate investment tumbled 36.8 percent in the third quarter, the government said last week. In July, Standard & Poor's cut Taiwan's long-term credit rating one notch to "AA."
Fitch's "A+" rating on Taiwan's long-term foreign-currency debt is higher than the agency's ratings for South Korea, the Philippines, Thailand and Indonesia.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
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