The Middle East will hit many Asia-Pacific corporate sectors through oil price hikes, shipping and supply chain disruptions, dampened demand, and delayed cyclical rebounds, Fitch Ratings said in a recent release.
The war could have a lingering economic and business impact in the second half of 2026 even if it ends earlier, since it would take time for markets to normalize, the rating agency said.
Corporates in the region also face other developments that are credit-impacting, such as geopolitical tensions, sanctions, and tariff uncertainties, according to Fitch.
Meanwhile, growth varies within the region, with China exhibiting declining domestic demand, lingering price competition, and excess capacity that weigh on companies in the consumer, industrial, building materials, and automotive sectors, Fitch said.
India and some Southeast Asian countries have solid domestic growth and infrastructure spending as well as robust household consumption, anchoring credit trends in local demand-tied sectors, according to the rating agency.
Fitch still sees EBITDA margins to remain strong and rise above 15% on aggregate for its issuers in the region, supporting improved free cash flow generation.