Fitch Flags Deteriorating Outlook For Global Sovereigns Amid Tariffs And Policy Uncertainty
Fitch Ratings has revised its 2025 global sovereigns outlook to 'deteriorating' from 'neutral,' citing rising trade tariffs, ongoing policy uncertainty and increasing risks to global growth and financing conditions.
The rating agency warned that escalating trade tensions and unclear tariff endpoints are delivering a significant global economic shock, disrupting trade volumes, supply chains and international investment flows. These factors have also added uncertainty to the trajectory of US Federal Reserve interest rates and increased the likelihood of volatile financing conditions.
Fitch highlighted that Brent crude oil prices are expected to fall to US$65 a barrel in 2025 from US$79.5 in 2024, adding economic and fiscal pressure on major oil-exporting nations. Meanwhile, cuts to US international aid may further expose some emerging markets to economic risk. However, a weaker US dollar could offer some relief to countries with dollar-denominated debt, potentially allowing for faster interest rate cuts by their central banks.
Government finances, especially in developed economies, are expected to remain strained due to higher defence spending, demographic pressures, elevated interest costs and persistent social demands. Fitch projects median government debt-to-GDP will edge up to 54.5% by the end of 2025, compared to 54.1% at end-2024.
Geopolitical tensions — including the wars in Ukraine and the Middle East, US-China strategic rivalry and trade frictions — are also contributing to the deteriorating outlook.
Despite the shift, Fitch noted that rating outlooks remain broadly balanced, with 13 sovereigns on Positive Outlook compared to 10 on Negative. Downgrades in recent years have created some resilience within ratings to absorb further shocks, and targeted policy actions could continue to provide support. Related
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
2 hours ago
- Malay Mail
Dongfeng Motor Launches Flagship Innovation, Driving Global Value Chain Advancement with China Intelligent Manufacturing
Dongfeng Motor Launches Flagship Innovation, Driving Global Value Chain Advancement with China Intelligent Manufacturing HONG KONG SAR - Media OutReach Newswire - 13 June 2025 -The International Automotive & Supply Chain Expo (Hong Kong) 2025 opened on June 12, bringing together global industry leaders. Seizing this strategic opportunity in Hong Kong, Dongfeng Motor is showcasing its technological edge and promoting nine flagship models covering both passenger and commercial vehicle segments. Dongfeng Motor aims to rank among the top three Chinese passenger vehicle brands in the Hong Kong market by 2025 and to lead the high-end right-hand-drive commercial vehicle segment among Chinese several days of international media attention and coverage, the Expo is now underway as scheduled. Dongfeng Motor, alongside 10 other leading Chinese automotive manufacturers, is taking part in the event to demonstrate the strength of China's automotive industry. Leveraging this global platform, Dongfeng Motor is elevating its international brand presence and targeting emerging markets with the opening day of the Expo, several distinguished guests—including Lau Yip-wong, Member of the Standing Committee of the Chinese People's Political Consultative Conference (CPPCC); Zhou Qiang, Deputy Director-General of the Economic Affairs Department of the Liaison Office of the Central People's Government in the HKSAR; and Li Peng, Chief Representative of the China Council for the Promotion of International Trade (CCPIT) Representative Office in Hong Kong, representatives from leading organizations such as Sinomach (China National Machinery Industry Corporation), China Merchants Group, China Resources Group, the Hong Kong Trade Development Council (HKTDC), the Macao Chamber of Commerce, and the Hong Kong Cross-Strait Peaceful Development Association —visited the Dongfeng Motor booth and attended the official brand launch the theme "Dongfeng Advance, The Pearl Radiates," Dongfeng Motor arrived in Hong Kong bearing the achievements of Chinese innovation, aiming to position "Chinese Automobiles" as an amazing business card of global connectivity. This initiative also supports Hong Kong's deeper integration into China's national development strategy. At the event, Mr. You Zheng, Deputy President of Dongfeng Motor Corporation, presented the brand's strategic vision to a distinguished audience of guests and leading media You highlighted that Dongfeng Motor was founded during the "Third Front" construction, grew amid reform and opening-up, prospered in the new century—now rising with innovation in the new era. Technological innovation has always been the core of Dongfeng Motor's brand company continues to pioneer multiple powertrain pathways, focused on PHEV, pure electric and hydrogen energy. Dongfeng Motor has launched several pioneering platforms and architectures, including the MHERO new-gen off-road platform, quantum architecture all electric platform, and multi-energy low-carbon energy saving architecture, empowering the full spectrum of its passenger vehicle addition, Dongfeng Motor is accelerating the development of "Embodied Intelligence," advancing the integration of Tri-Network convergence, Penta-Smart integration. This strategy aims to equip Dongfeng Motor's next-generation smart vehicles with a robust physical structure ("Robust Body"), powerful performance systems ("Powerful Heart"), intelligent control systems ("Intelligent Brain"), and responsive digital infrastructure ("Agile Nervous System"). Recently, Dongfeng Motor also introduced its "TIANYUAN Intelligence" technology brand, which anchors its new "One Core + Dual Foundations + Dual Elements" smart mobility You emphasized that Dongfeng Motor will use the Hong Kong market as a strategic pivot to accelerate expansion into new global markets. In 2024, Dongfeng Motor's total vehicle exports exceeded 250,000 units, up 8.2% year-on-year. From January to April 2025 alone, overseas exported 77,000 units, marking a 7.7% increase over the same period last year. Dongfeng Motor is now accelerating the internationalization leap, with a clear target of 1-Million overseas sales annually in the near the event, Dongfeng Motor signed strategic cooperation agreements with passenger and commercial vehicle fleet clients, marking a significant milestone and opening a new chapter of partnership and Motor's booth was among the largest corporate exhibits at this year's Expo, designed to highlight the integration of company's technology, intelligence, interactivity, and diversity."Welcome to the Dongfeng Motor booth. What you're seeing now is..." From the moment visitors set foot on the stand, they were greeted by an AI-powered robotic dog, adding a futuristic and engaging element to vehicle introductions and welcoming interactions. The booth also featured a variety of interactive experiences that blended automotive culture with entertainment, earning widespread praise and enthusiastic feedback from Motor presented a lineup of nine vehicles, spanning both passenger and commercial models, with a strong emphasis on newly launched products, new energy vehicles (NEVs), and intelligent mobility solutions. Four standout models made their international debut at the Expo: MHERO II, DONGFENG 007, DONGFENG VIGO, and DONGFENG the exhibition area, Dongfeng Motor's luxury electric off-road brand MHERO showcased two models. The MHERO I, the brand's inaugural release, is built on the proprietary M TECH intelligent off-road platform. It boasts a peak power output of 800 kW and maximum torque of 1,400 N·m, accelerating from 0 to 100 km/h in just 4.2 seconds—ensuring effortless performance in even the most demanding off-road MHERO II, hailed as the "The Luxury Intelligent Off-Roader," is the brand's second strategic model. It embodies MHERO's signature "Chinese Awakening Lion" design philosophy and is equipped with CATL's cutting-edge Freevoy off-road battery. Notably, the MHERO II is one of the first models globally to feature Huawei ADS 4.0 and HarmonySpace, delivering a highly advanced and immersive driving DREAM, the flagship model of Dongfeng Motor Corporation's premium intelligent new energy brand VOYAH, made a high-profile appearance at the Expo. Upholding VOYAH's core service philosophy of "Wholehearted Dedication" and the brand belief that "Safety is the Ultimate Luxury," the model embodies both emotional care and advanced and VOYAH are achieving impressive international growth, with year-on-year sales tripling. The MHERO I has entered over 50 countries, while VOYAH has expanded into more than 30 markets, setting new benchmarks for the global reach of Chinese premium new energy vehicle featured at the Dongfeng Motor booth were other star models, including the DONGFENG 007—intelligent and elegant electric coupe; the DONGFENG VIGO—national smart and fun pure electric SUV; and the DONGFENG BOX—high-quality chic electric SUV tailored for urban drivers. According to sales data from January to April this year, the DONGFENG BOX has been exceptionally well-received in Hong Kong and Singapore, ranking among the top two in its showcased were two commercial right-hand drive models: the DONGFENG KL320 and DONGFENG GX, built specifically to meet the needs of right-hand drive markets such as Hong Kong, Macau, and ASEAN countries. The DONGFENG KL320 is a all-scenario high-value commercial vehicle that serves a wide range of use cases—from trunk logistics and infrastructure projects to concrete transport. Equipped with 13 driving modes, it delivers leading fuel efficiency and driving comfort, making it particularly well-suited for Hong Kong's commercial date, Dongfeng Commercial Vehicles have achieved cumulative sales of over 15 million units. From January to April 2025, Dongfeng Motor ranked No.1 in terminal market share for the medium and heavy duty truck segment in China, holding a dominant 22.7% share and solidifying its leadership in the a trailblazer in China's automotive industry, Dongfeng Motor advances in harmony with the nation, the times, and the people. With a reputation for excellence and innovation, Dongfeng Motor is reshaping the international competitiveness of Chinese automotive brands. Leveraging this global platform, the company is intensifying efforts to expand in Hong Kong, Macau, ASEAN, and other emerging markets—creating a better mobility life for users in Hong Kong and beyond by smart technology & premium products. Dongfeng Motor is proud to be a shining symbol of China's automotive strength on the global stage—the "Eastern Pearl" of the #DongfengMotor The issuer is solely responsible for the content of this announcement.
The Star
3 hours ago
- The Star
Japan party leaders face off over no-confidence motion; Opposition hesitant amid tariff negotiations with United States
Prime Minister Shigeru Ishiba, (right), and Constitutional Democratic Party leader Yoshihiko Noda participate in the party leader debate at the Diet in Tokyo on Wednesday (June 11, 2025). - Photo: The Yomiuri Shimbun TOKYO: A tense standoff took place during a debate between party leaders in the Diet on Wednesday (June 11) as the ruling Liberal Democratic Party and the main opposition party grappled with a potential no-confidence motion against the Cabinet of Prime Minister Shigeru Ishiba. Ishiba, who also serves as LDP president, and Yoshihiko Noda, president of the Constitutional Democratic Party of Japan, waged a war of nerves at the final party leader debate of the current Diet session. Noda took a confrontational stance, despite appearing inclined to forgo the no-confidence motion, but he lacked vigor. This highlighted his struggle to keep the CDPJ at an appropriate distance from the government and the ruling bloc. Arguments lacked depth During the debate, Noda emphasised measures to combat rising prices. He asserted that the approach taken by Ishiba Cabinet's tended to 'understand the issues but either postpones [taking steps] or does nothing.' However, Noda noticeably lacked depth in the pursuit of individual issues. He pressed for the consumption tax rate on food to be reduced to 0%, which is one of the CDPJ's campaign pledges for the House of Councillors election. However, Ishiba rejected a possible tax cut, saying: 'Mr. Noda understands the significance of the consumption tax better than anyone. I respect him as a politician.' Noda questioned Ishiba about the Japan-US tariff negotiations, asking, 'Is there a prospect of reaching an agreement on main points?' Ishiba remained unruffled and responded: 'We are making progress one step at a time. Ultimately, [US] President [Donald Trump] will make the decision.' Noda wavering Noda failed to fully commit to a confrontational stance, as he hesitated about submitting a no-confidence motion. The CDPJ has submitted no-confidence motions in ordinary Diet sessions every year since 2018, except in 2020, when priority was given to Covid-19 countermeasures. Under a minority government, the opposition can pass such a motion if it is united. Normally, this would be a once-in-a-lifetime opportunity for the opposition to bring about a change of government. Noda had hinted at submitting a motion but began to waver, questioning whether such a political decision was appropriate amid ongoing tariff negotiations with the United States, which is considered a national crisis. If Japan-US tariff negotiations continue even after their bilateral summit meeting — scheduled on the sideline of the Group of Seven summit from Sunday to Tuesday — the CDPJ could face public criticism if a political vacuum emerges from the passage of a no-confidence motion. Furthermore, if the tariff negotiations are successful, that would also make it difficult for the party to submit such a motion. On the other hand, there are simmering voices within the CDPJ to demonstrate a more aggressive and confrontational stance by submitting the motion. Noda had even told aides before the party leader debate that he was genuinely struggling with the decision of whether to submit the motion. Avoiding dissolution If a no-confidence motion is submitted, some within the government and the LDP believe the House of Representatives should be dissolved without a vote on the motion. But junior coalition partner Komeito opposes holding simultaneous elections for both houses. Nevertheless, if a no-confidence motion passes, Ishiba would have no choice but to either dissolve the lower house or see his Cabinet resign en masse. Many within the ruling party believe there would be no option but dissolution if it passed. The prime minister wants to avoid the political vacuum caused by dissolution, and intends to courteously respond to talks between the ruling and opposition party leaders on tariff negotiations around the time of the G7 Summit. Ishiba is trying to save face for Noda while hoping the CDPJ will not submit the motion. - The Yomiuri Shimbun
The Sun
5 hours ago
- The Sun
Asean's ambition of being world's fourth biggest economy by 2030 well within reach: Tengku Zafrul
KUALA LUMPUR: Asean's ambition to become the world's fourth-largest economy by 2030 is well within reach, provided the region sustains an annual gross domestic product (GDP) growth rate between 4% and 5%. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz highlighted the region's robust growth prospects at the official launch of the Asean Economic Community (AEC) Strategic Plan today. 'Our economists have thoroughly analysed the growth projections for all Asean economies under current conditions, and we are confident that the targets are indeed achievable,' he said. Tengku Zafrul noted that the Asean Secretariat projects regional GDP growth at 4.7% for 2025, as presented at the latest Asean Economic Ministers' Meeting. 'But things are very dynamic. It depends on the global economic situation. The IMF (International Monetary Fund) will also produce their forecast of global growth,' he said, stressing the need for vigilance amid shifting external factors. Tengku Zafrul emphasised the AEC Strategic Plan's role in keeping Asean's policies current and responsive to evolving business needs and emerging challenges. 'As the first instalment of this long-term vision, the plan serves as a comprehensive roadmap that outlines a clear and actionable path forward,' he said. The plan has been carefully crafted to implement the economic aspects of the Asean Community Vision 2045, leveraging the region's vast opportunities and potential. A key pillar of the plan is the establishment of a forward-looking digital economic framework, which is expected to double Asean's digital economy to US$2 trillion (RM4.5 trillion) by 2030. The focus on digital transformation, alongside sustained economic integration and resilience, positions Asean to not only achieve its growth targets but also to strengthen its global influence. On the domestic front, Tengku Zafrul sees positive signals from foreign investors in Malaysia, with no indication of existing investors withdrawing their commitments despite ongoing global uncertainties. 'So far, no existing investors have expressed any intention to exit Malaysia. They remain committed to their investments, and no cancellations have been announced.' However, he observed that new investors are adopting a more cautious, 'wait and see' approach, influenced by heightened geopolitical tensions – particularly between the United States and China – and broader global volatility. Looking ahead, Tengku Zafrul said his trade negotiations in Washington on June 18 will focus on reducing tariffs on Malaysian exports. 'The negotiations are essentially to address the current tariff structure, where the US has imposed a 24% tariff on Malaysia. Our first goal is to bring that down.' The second objective is to identify key sectors where Malaysia believes tariffs should be reduced even below the 10% floor, targeting industries important to both Malaysian exporters and the US economy. In April, the US government announced new tariff measures affecting more than 60 countries, including Malaysia. The implementation of these tariffs has been paused for 90 days to allow room for negotiations.
