Nineteen of 20 sovereign ratings in the region have “stable” or “positive” outlooks, reflecting the cushion provided by strong fiscal and external buffers, as well as shock-absorbers, from flexible policy frameworks in these economies, Fitch said on Tuesday.

Hong Kong’s ‘AA’ rating is still quite high…if the unrest could be resolved and business sentiment recovers, it’ll be helpful for future ratings

It said the only “negative” outlook for the region is Hong Kong’s “AA” rating downgraded from “AA+”, explaining that the city’s persistent unrest has damaged international perceptions of governance, and called into question the stability and dynamism of the SAR’s business environment.

Andrew Fennell, lead sovereign analyst for China at Fitch Ratings, said records show that an economy that has been downgraded is likely to see its rating lowered again in eight to nine months.

But, he stressed that Hong Kong’s “AA” rating is still quite high, expressing confidence in the city’s linked exchange rate system and stable public finance management.

Meanwhile, Hong Kong’s fiscal reserves account for 40 percent of its gross domestic product, reflecting the city’s strong economic buffers.

Fennell said if the unrest could be resolved and business sentiment recovers, it’ll be helpful for future ratings.

Fitch said Hong Kong’s downgrade highlights the relevance of geopolitical risks for some Asia-Pacific sovereigns.

The agency has rated the Chinese mainland’s economy “A+” with a stable outlook, while Australia and Singapore are both rated “AAA” — the highest.

It believes the escalating trade tensions between China and the United States have darkened the global economic outlook. Fitch said the Chinese mainland’s economic growth is expected to fall to 6.1 percent this year and 5.7 percent in 2020 — down from previous forecasts of 6.2 percent and 6 percent, respectively, due to the latest round of tariffs.