Steady outlook for APAC transport infrastructure as Fitch ratings forecasts resilient demand
Dec 04, 2023
New Delhi [India], December 4 : Fitch Ratings anticipates a neutral outlook for transportation infrastructure in the Asia-Pacific (APAC) region, citing resilient demand and the vital role of these facilities. Despite challenges like fuel price surges and high-interest rates, Fitch expects the essential nature of transportation to mitigate negative impacts on traffic.
The sector outlook is grounded in the expectation of stabilizing economic growth in 2024, as indicated by Fitch's latest Global Economic Outlook.
While manufacturing activities might witness a slowdown in some markets, consumer spending resilience and the critical role of transportation facilities are anticipated to limit effects on volume-based assets.
Fitch foresees a decline in throughput in the port sector in 2024, reflecting normalizing GDP growth after a post-pandemic surge.
However, airports in APAC are expected to benefit from the release of pent-up demand, with growth likely to decelerate in the latter part of 2024.
Despite robust long-term fundamentals driving capital investments in APAC's transportation infrastructure, caution may prevail among sponsors due to escalating construction costs and persistently high finance costs.
Nevertheless, Fitch underscores that Fitch-rated borrowers maintain robust access to funding channels, providing stability amid evolving market conditions.
