According to Moody's, oil prices are likely to fall to almost $70 a barrel by the end of 2024.

The agency pointed out that oil prices had shot up to $120 barrels in June this year amid Russia's invasion of Ukraine but fell below $100 this month.

In its report on the Asia Pacific (APAC), Moody's said APAC is a big oil importing region with Singapore and Hong Kong being the primary oil importing countries. It said for net energy importers, namely South Korea, Japan, Thailand and Singapore, the effect on household energy bills has been considerable. The report said countries dependent on the import of liquified natural gas, namely Taiwan, China, Japan and South Korea, were vulnerable to price&nbsp;increases.

<a href="https://www.wionews.com/world/biden-signs-the-inflation-reduction-act-a-toned-down-version-of-his-build-back-better-plan-507583">Also Read:&nbsp;Bureau of Land Management halts oil and gas leasing</a>

Moody's Analytics said with the increase in oil prices, India, Pakistan and Vietnam are paying more and higher commodity prices are hurting households and adding to global inflation.

However, Australia has been experiencing an export boom due to increased coal and LNG prices which have helped its mining industry and boosted government revenue, the reports said.

Watch:&nbsp;Russian oil transit halted via Druzhba pipeline to central Europe

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Similarly, oil exporting countries in the Asia Pacific region, namely Indonesia and Malaysia, have seen an uptick in revenue due to increase in oil prices.

Oil prices tumbled five per cent on Monday due to China's weak economic recovery as the country's central bank slashed key interest rates. China's industrial production and retail sales plunged last month although industrial production was&nbsp;up.

China's National Bureau of Statistics warned that the risk of stagflation in the world economy is rising. The report made Wall Street jittery as stocks fell initially on Monday but recovered later amid fears of global recession.

Oil prices were also affected by prospects of return of Iranian oil into the international market. Iran said it would be delivering its final proposal to revive the stalled 2015 nuclear deal amid possibility of crude oil entering the market which could relieve supply constraints.

(With inputs from Agencies)

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According to Moody's, oil prices are likely to fall to almost $70 a barrel by the end of 2024. The agency pointed out that oil prices had shot up to $120 barrels in June this year amid Russia's invasion of Ukraine but fell below $100 this month.

According to Moody's, oil prices are likely to fall to almost $70 a barrel by the end of 2024. The agency pointed out that oil prices had shot up to $120 barrels in June this year amid Russia's invasion of Ukraine but fell below $100 this month. In its report on the Asia Pacific (APAC), Moody's said APAC is a big oil importing region with Singapore and Hong Kong being the primary oil importing countries. It said for net energy importers, namely South Korea, Japan, Thailand and Singapore, the effect on household energy bills has been considerable. The report said countries dependent on the import of liquified natural gas, namely Taiwan, China, Japan and South Korea, were vulnerable to price increases. Also Read: Bureau of Land Management halts oil and gas leasing Moody's Analytics said with the increase in oil prices, India, Pakistan and Vietnam are paying more and higher commodity prices are hurting households and adding to global inflation. However, Australia has been experiencing an export boom due to increased coal and LNG prices which have helped its mining industry and boosted government revenue, the reports said. Watch: Russian oil transit halted via Druzhba pipeline to central Europe Similarly, oil exporting countries in the Asia Pacific region, namely Indonesia and Malaysia, have seen an uptick in revenue due to increase in oil prices. Oil prices tumbled five per cent on Monday due to China's weak economic recovery as the country's central bank slashed key interest rates. China's industrial production and retail sales plunged last month although industrial production was up. China's National Bureau of Statistics warned that the risk of stagflation in the world economy is rising. The report made Wall Street jittery as stocks fell initially on Monday but recovered later amid fears of global recession. Oil prices were also affected by prospects of return of Iranian oil into the international market. Iran said it would be delivering its final proposal to revive the stalled 2015 nuclear deal amid possibility of crude oil entering the market which could relieve supply constraints. (With inputs from Agencies) WATCH WION LIVE HERE

Global oil prices expected to fall in 2024: Moody's

Moody&#39;s Investors Service downgraded China&#39;s credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.

The one-notch downgrade in long-term local and foreign currency issuer ratings, to A1 from Aa3, comes as the Chinese government grapples with the challenges of rising financial risks stemming from years of credit-fueled stimulus.

&quot;The downgrade reflects Moody&#39;s expectation that China&#39;s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,&quot; the ratings agency said in a statement, changing its outlook for China to stable from negative.

China&#39;s Finance Ministry said the downgrade, Moody&#39;s first for the country since 1989, overestimated the risks to the economy and was based on &quot;inappropriate methodology&quot;.

&ldquo;Moody&rsquo;s views that China&rsquo;s non-financial debt will rise rapidly and the government would continue to maintain growth via stimulus measures are exaggerating difficulties facing the Chinese economy, and underestimating the Chinese government&rsquo;s ability to deepen supply-side structural reform and appropriately expand aggregate demand,&rdquo; the ministry said in a statement.

China&#39;s leaders have identified the containment of financial risks and asset bubbles as a top priority this year. All the same, authorities are moving cautiously to avoid knocking economic growth, gingerly raising short-term interest rates while tightening regulatory supervision.

At the same time, Beijing&#39;s need to deliver on official growth targets is likely to make the economy increasingly reliant on stimulus, Moody&#39;s said.

&quot;While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government,&quot; it said.

While the downgrade is likely to modestly increase the cost of borrowing for the Chinese government and its state-owned enterprises (SOEs), it remains comfortably within the investment grade rating range.

World stocks inched lower after the move, though Shanghai&#39;s main index recouped early losses to end marginally higher.

&quot;After being very much at the front and center of global risk sentiment at the beginning of last year, the Chinese slowdown story has been almost forgotten, with politics throughout Europe and the US&nbsp;taking the limelight,&quot; said David Cheetham, chief market analyst at brokerage XTB.

The yuan currency briefly dipped against the US&nbsp;dollar in offshore trading, as did the Australian dollar, often seen as a proxy for China risk.

&quot;It&#39;s going to be quite negative in terms of sentiment, particularly at a time when China is looking to de-risk the banking system (and) when there&rsquo;s going to be some potential restructuring of SOEs,&quot; said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank&#39;s Treasury division.

Growth to slow

In March 2016, Moody&#39;s cut its outlook on China&#39;s ratings to negative from stable, citing rising debt and uncertainty about authorities&#39; ability to carry out reforms.

Rival ratings agency Standard &amp; Poor&#39;s downgraded its outlook to negative in the same month. S&amp;P&#39;s AA- rating is one notch above both Moody&#39;s and Fitch Ratings, leading to speculation among analysts that S&amp;P could also downgrade soon.

&quot;We understand the risk and the reason for the&nbsp;downgrade, but due to China being a unique system &ndash; (with a) closed capital account and strong government control over all important sectors - it can tolerate a higher debt level,&quot; said Edmund Goh, a Kuala Lumpur-based investment manager at Aberdeen Asset Management.

The slowing economy has become an increasingly sensitive topic in China, with authorities directing mainland Chinese economists and journalists toward more positive messaging.

Authorities have stepped up efforts over the last several months to curb debt and housing risks, and a raft of recent data has signalled a cooling in the economy, which grew a solid 6.9 per cent in the first quarter.

China&#39;s potential economic growth was likely to slow toward 5 per cent in coming years, but the cooldown is likely to be gradual due to further doses of fiscal stimulus, Moody&#39;s said.

Debt under control?

The Finance Ministry said continued mid- to high-level economic growth &quot;will provide fundamental support to fend off local government debt risks. China&rsquo;s government debt risks will not change dramatically in 2018-2020 from 2016.&quot;

The state planner, the National Development and Reform Commission (NDRC), said debt risks are generally controllable as measures to lower corporate leverage have achieved initial results, and systemic risks from debt are relatively low.

In a statement on its website hours after Moody&#39;s downgrade, the NDRC said China&#39;s debt level is not high in absolute terms compared with developed countries such as the United States and Britain, and the growth rate is &quot;clearly&quot; moderating.

&quot;China&#39;s debt is mostly domestic,&quot; it added. &quot;And our leverage is supported by a high deposit rate (at around 50 per cent), (so) the possibility to trigger systemic risks is relatively low.&quot;

Government-led stimulus has been a major driver of China&#39;s growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt - now standing at nearly 300 per cent of gross domestic product (GDP).

Julian Evans-Pritchard, China economist at Capital Economics in Singapore, said steps to resolve the debt overhang, such as debt-for-equity swaps at state companies, were insufficient to deal with the&nbsp;problem.

&quot;It&rsquo;s reached the point where the bad debt problem is just so large the government will have to step in to resolve it at some point, and that obviously means at some point a sizeable increase in government debt,&quot; he said.

Moody&#39;s said it expects the government&#39;s direct debt burden to rise gradually toward 40 per cent of GDP by 2018 &quot;and closer to 45 per cent by the end of the decade&quot;.

A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount.

Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signalled an increasing risk of a banking crisis within three years.

(Reuters)

The downgrade reflects Moody's expectation that China's financial strength will erode somewhat over the coming years

Moody's Investors Service downgraded China's credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise. The one-notch downgrade in long-term local and foreign currency issuer ratings, to A1 from Aa3, comes as the Chinese government grapples with the challenges of rising financial risks stemming from years of credit-fueled stimulus. "The downgrade reflects Moody's expectation that China's financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows," the ratings agency said in a statement, changing its outlook for China to stable from negative. China's Finance Ministry said the downgrade, Moody's first for the country since 1989, overestimated the risks to the economy and was based on "inappropriate methodology". “Moody’s views that China’s non-financial debt will rise rapidly and the government would continue to maintain growth via stimulus measures are exaggerating difficulties facing the Chinese economy, and underestimating the Chinese government’s ability to deepen supply-side structural reform and appropriately expand aggregate demand,” the ministry said in a statement. China's leaders have identified the containment of financial risks and asset bubbles as a top priority this year. All the same, authorities are moving cautiously to avoid knocking economic growth, gingerly raising short-term interest rates while tightening regulatory supervision. At the same time, Beijing's need to deliver on official growth targets is likely to make the economy increasingly reliant on stimulus, Moody's said. "While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government," it said. While the downgrade is likely to modestly increase the cost of borrowing for the Chinese government and its state-owned enterprises (SOEs), it remains comfortably within the investment grade rating range. World stocks inched lower after the move, though Shanghai's main index recouped early losses to end marginally higher. "After being very much at the front and center of global risk sentiment at the beginning of last year, the Chinese slowdown story has been almost forgotten, with politics throughout Europe and the US taking the limelight," said David Cheetham, chief market analyst at brokerage XTB. The yuan currency briefly dipped against the US dollar in offshore trading, as did the Australian dollar, often seen as a proxy for China risk. "It's going to be quite negative in terms of sentiment, particularly at a time when China is looking to de-risk the banking system (and) when there’s going to be some potential restructuring of SOEs," said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank's Treasury division. Growth to slow In March 2016, Moody's cut its outlook on China's ratings to negative from stable, citing rising debt and uncertainty about authorities' ability to carry out reforms. Rival ratings agency Standard & Poor's downgraded its outlook to negative in the same month. S&P's AA- rating is one notch above both Moody's and Fitch Ratings, leading to speculation among analysts that S&P could also downgrade soon. "We understand the risk and the reason for the downgrade, but due to China being a unique system – (with a) closed capital account and strong government control over all important sectors - it can tolerate a higher debt level," said Edmund Goh, a Kuala Lumpur-based investment manager at Aberdeen Asset Management. The slowing economy has become an increasingly sensitive topic in China, with authorities directing mainland Chinese economists and journalists toward more positive messaging. Authorities have stepped up efforts over the last several months to curb debt and housing risks, and a raft of recent data has signalled a cooling in the economy, which grew a solid 6.9 per cent in the first quarter. China's potential economic growth was likely to slow toward 5 per cent in coming years, but the cooldown is likely to be gradual due to further doses of fiscal stimulus, Moody's said. Debt under control? The Finance Ministry said continued mid- to high-level economic growth "will provide fundamental support to fend off local government debt risks. China’s government debt risks will not change dramatically in 2018-2020 from 2016." The state planner, the National Development and Reform Commission (NDRC), said debt risks are generally controllable as measures to lower corporate leverage have achieved initial results, and systemic risks from debt are relatively low. In a statement on its website hours after Moody's downgrade, the NDRC said China's debt level is not high in absolute terms compared with developed countries such as the United States and Britain, and the growth rate is "clearly" moderating. "China's debt is mostly domestic," it added. "And our leverage is supported by a high deposit rate (at around 50 per cent), (so) the possibility to trigger systemic risks is relatively low." Government-led stimulus has been a major driver of China's growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt - now standing at nearly 300 per cent of gross domestic product (GDP). Julian Evans-Pritchard, China economist at Capital Economics in Singapore, said steps to resolve the debt overhang, such as debt-for-equity swaps at state companies, were insufficient to deal with the problem. "It’s reached the point where the bad debt problem is just so large the government will have to step in to resolve it at some point, and that obviously means at some point a sizeable increase in government debt," he said. Moody's said it expects the government's direct debt burden to rise gradually toward 40 per cent of GDP by 2018 "and closer to 45 per cent by the end of the decade". A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount. Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signalled an increasing risk of a banking crisis within three years. (Reuters)

Moody's downgrades China for the first time since 1989

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Global oil prices expected to fall in 2024: Moody's

Moody's downgrades China for the first time since 1989