Sri Lanka, May 9 -- Emerging-market (EM) issuers are variously exposed to direct and indirect impacts from the global trade war, Fitch Ratings says in a new report. Credit pressures may become most evident in EMs where tariff effects combine with aggravating factors or add to pre-existing pressures, even if direct US tariff exposures are small.
APAC's high trade openness and exposure to US demand leave it particularly exposed to direct tariff risks, but all regions will be affected, with Fitch expecting global growth to fall below 2% this year. We forecast Chinese growth to be below 4% this year and next, and US growth to slow to a crawl over 2025.
Potential aggravating factors include separate US policy changes such as reductions to fore...