Further downgrades are expected in emerging markets this year after the 30 seen in just the fourth quarter last year, according to S&P Global Ratings.
In the last three months of 2016 both corporate and sovereign issuers were among the 30 that were downgraded.
If a country gets downgraded, the corporates operating there may find their ratings under threat as well.
Diane Vazza, head of global fixed income at S&P, said markets most likely to incur downgrades will be Latin America, Eastern Europe, and the Middle East and Africa.
Vazza said the regions with a higher likelihood of downgrades have a higher “negative bias”, meaning the proportion of issuers with either negative ratings or negative outlooks from S&P.
The negative bias is sharply above historical averages owing to a continued environment of low commodity prices, strong geopolitical uncertainty, and financial volatility.
“In addition, it remains to be seen how the [Donald] Trump presidency’s trade and foreign relations policies could affect emerging markets,” said Vazza.
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