Asia Pacific sovereign ratings trend will be stable over 2017 despite more countries on a negative footing since mid-2010, though credit metrics could weaken should financial market volatility reappear.
Global ratings agency Standard & Poor's (S&P) on Wednesday said world economic performance was still weighed down by some advanced economies, and with uncertain political developments in Europe and the United States.
"Anti-globalization sentiments are increasing and the risk of protectionist measures is growing," S&P Global Ratings credit analyst Kim Eng Tan said in a statement.
"This is a negative development for Asia-Pacific, which has benefited much from global trade and investment flows. The risk may rise further if upcoming elections in Europe produce more surprises."
Financial market volatility will return should the integrity of the European Union again be called into question or anti-trade measures become more likely, resulting in a deterioration of financing conditions and weakening credit metrics well before the impact to trade is evident.
The key credit worthiness however will be the capacity of governments to implement measures and the effectiveness of policy to shape their respective credit profiles in response to these challenges, Moody's Investors Service associate managing director Marie Diron said.
"Authorities are formulating policies that range from those that address acute near term challenge to those that set the state for longer-term improvements in credit profiles," Diron said.
"However, capacities to implement these policies differ across countries, as evident in Moody's scores for industrial strength, which vary greatly across the region."
Moody's, Like S&P, rates the creditworthiness outlook for the Asia-Pacific as stable in 2017.