Economic News
- Alvise Lennkh
Unavoidable spending by EU States is limiting funds needed for defence and green investment, testing NATO targets and climate goals. Shifting spending to the supranational level and carbon taxes could help.
- Dennis Shen
The Tusk coalition will have beaten the odds if it secures a parliamentary majority. The change of government supports the country’s credit standing, despite potential governance and budgetary challenges.
- Thomas Gillet
The escalation of the Israeli-Palestinian conflict increases credit risks for Israel in the first instance but there are potentially deeper implications if the conflict spills over to the wider Middle East.
- Brian Marly
An extended period of higher euro area interest rates is testing governments’ debt management as financing costs rise, adding urgency to the need for fiscal reforms to create space for spending priorities.
- Alessandra Poli
Italy’s fiscal consolidation and compliance with forthcoming EU rules is critical to ensure eligibility of Italian securities under the ECB’s TPI, which is a key driver of its BBB+/Stable Outlook rating.
- Eiko Sievert
The risk of policy mistakes has increased as China’s authorities try to tackle financial imbalances, including high local government debt, while shifting towards a consumption-led growth model.
- Thomas Gillet
The Turkish central bank’s unexpectedly hawkish shift in policy helps rebuild credibility in inflation targeting but fast-rising consumer prices will test the commitment to the current monetary stance.
- Dennis Shen
Scope Ratings senior writer Keith Mullin interviews Dennis Shen, lead analyst for Greece, after Scope Ratings’ upgrade of Greece to an investment-grade (IG) rating of BBB-.
- Dennis Shen
Scope Ratings has never rated the United States AAA. Ever since the agency published AA ratings on the US in September of 2017, Scope has never rated the borrower higher than this level.
- Dr. Giacomo Barisone
High headline inflation will continue to decline in the 11 EU countries of Central and Eastern Europe (CEE-11) but tight monetary policy and weak external demand are muting the economic recovery.
- Giulia Branz
Italy’s high public debt, elevated annual gross financing needs around 25% of GDP, and rising interest costs are a major rating constraint, underscoring need for multi-year fiscal consolidation.
- Thomas Gillet
A curtailed currency devaluation and slow privatisations cloud the outlook for stabilising Egypt’s external finances. Meeting IMF conditions is critical for shoring up reserves and investor confidence.
- Dr. Giacomo BarisoneSovereign Mid-year 2023 Outlook: Negative Rating Outlook Framed by Slowdown, High Debt, Rising Rates
Scope Ratings has revised up its 2023 global growth forecast modestly to 2.9% but has cut its 2024 forecast to 3%. More downside rating actions than upside are expected in the second half of this year.
- Thomas Gillet
Distressed African countries risk having weaker credit profiles for longer unless there are better co-ordinated debt restructurings. Any improvements need to overcome burden-sharing among more diverse creditor groups.
- Thomas Gillet
Turkish President Erdoğan has begun his new five-year term with unresolved economic challenges. Downside risks remain for the country’s credit ratings without a sustained change in economic governance.
- Dennis Shen
New legal action by the EU against Poland highlights persistent governance challenges, which together with elevated core inflation are weakening the country’s medium-term credit outlook.
- Eiko Sievert
Germany’s economy will return to modest growth in the second half of this year, but elevated inflation and volatile net exports will ensure the recovery remains weak at least until 2024.
- Thomas GilletTurkey: Erdoğan’s Re-election Limits Prospects for Tackling Economic Challenges, Unorthodox Policies
Turkey’s economy remains exposed to a disorderly adjustment following President Recep Tayyip Erdoğan’s election victory, putting pressure on the lira and the country’s external accounts.
- Dennis Shen
The policy continuity stemming from an expected re-election of New Democracy and a longer-run continuation of recent progress would support Greece’s creditworthiness.
- Thomas Gillet
With the presidential election heading to a run-off vote, Turkey faces multiple hurdles to recalibrate post-election economic policy to prevent deeper balance-of-payments problems and stabilise the lira.