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APAC lenders turn picky amidst trade disputes

APAC lenders turn picky amidst trade disputes
Recent trade disputes between China and the West may push lenders to turn more selective towards the “riskier sectors” of Asia Pacific.

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APAC Lenders are becoming more selective amidst recent trade disputes between China and the West. S&P Global Ratings reported that whilst the APAC region as a whole is still poised for growth in 2024, performance will be mixed per sector. Lenders may become more selective on who and where they do business with, particularly in the real estate sectors in China and Vietnam. They may also be more cautious in markets where households are stretched most by high interest rates and cost pressures, notably Australia and New Zealand. South Korea is also facing rising unemployment. Weaker domestic currencies will benefit APAC’s chemicals, commodities, and energy exporters, but negatively affect airlines, transportation, raw material, or energy-intensive manufacturers, as well as domestic conglomerates with diminishing cost pass-through ability. Local government spending could remain elevated in China, Australia, and New Zealand, leading to growing debt levels.