Fitch: Middle East Situation Still Poses Risks to Global Businesses
Golden Finance reported on July 4 that Fitch Ratings released a report stating that despite the signing of a temporary memorandum of understanding between the U.S. and Iran on June 17, retaliatory military strikes between the two parties continue, and the agreement remains fragile. Additionally, Israel's absence from the agreement leaves the Middle East situation still posing risks to global businesses. In its updated "negative scenario" analysis, Fitch pointed out that even if the currently set extreme scenarios (such as a 10% stock market decline, corporate bond spreads widening by 100–200 basis points, tightening monetary policy, and a significant global economic slowdown) do not fully materialize, they can still serve as references in the event of escalating conflict. Under this scenario, economic growth in the U.S. and the Eurozone would decline significantly. Fitch assessed 72 industry sub-sectors across six global regions, with most risk judgments remaining unchanged, while a few were adjusted upward or downward. Overall, Fitch believes that the "tail risk" of Middle East conflicts persists, and if the situation escalates again, it will continue to exert pressure on the global corporate credit environment and financial markets.