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Credit conditions negative for Africa, mixed for ME - Moody's

Credit conditions negative for Africa, mixed for ME - Moody's

Mubasher: A new report by Moody's Investors Service showed that credit conditions for emerging markets in 2019 will be more challenging as global growth slows, financial market volatility continues, interest rates rise and trade protectionism and geopolitical tensions heighten.

The rating agency's outlook is negative for Turkey and parts of Africa and mixed for the Middle East, the report noted.

“Commodity price trends, tightening global financial conditions, and domestic and geopolitical issues will drive credit risks to different degrees for issuers in Africa and the Middle East,” it added.

Moody's expects Turkey to have significantly slower economic activity than before, with a gross domestic product (GDP) growth of 1.5% in 2018, followed by a 2% contraction in 2019.

For issuers in many countries in the Gulf Cooperation Council (GCC) and in Africa, a continuing growth recovery should support credit conditions. However, growth rates will remain below levels achieved before the 2014/2015 slump in commodity prices, and a significant escalation in global trade tensions could further dampen growth.