This report does not constitute a rating action. International trade frictions and military conflicts grow as threats to Asia-Pacific sovereign creditworthiness in 2025. The stability of the global economy rests on tenuous truces in trade disputes and the conflicts in the Middle East. The positive momentum of Asia-Pacific sovereign ratings faces considerable risks. The first half of 2025 saw no change in sovereign rating or outlook despite the significant shocks to the global economy. In part, this reflected expectations that the global economy will avoid the worst outcomes possible. Amid the more uncertain global environment, we continue to expect domestic developments in some regions to support improvements in credit metrics. Hence, we maintain positive rating outlooks on three Asia-Pacific governments.
