Moody's: Global Sovereigns Have Stable Outlook for 2018

Moody's anticipates global GDP growth to exceed 3%, with most Asian sovereigns maintaining a stable outlook. Exceptions include a negative outlook for Sri Lanka and positive outlooks for Vietnam and Indonesia. Risks such as central bank stimulus withdrawal and potential inflation overshooting are highlighted, particularly affecting countries reliant on external financing. Interest rate shocks pose a threat to lower-rated sovereigns, though a gradual normalization of global policy rates is expected.

How do interest rate shocks affect countries with different financing structures?

What is the current expectation for global policy rates according to the text?