While not Fitch's central case, a double-dip recession, or even stagnation in emerging markets, could have a negative impact on the ratings of emerging market corporate issuers.

Current base case forecasts reflect a muted, although real recovery for 2010, and an acceleration of this recovery into 2011. The fragility of this expected recovery is reflected in the fact that 43% of emerging market corporate issuers rated by Fitch either have a negative outlook or are on rating watch negative.

Fitch's special report, entitled "EMEA Emerging Markets Corporate Outlook 2010" and published on December 16, 2009, summarised the outlook for corporate ratings across the region based on Fitch's rating case expectations. The agency believes its corporate rating coverage is moving towards some stabilisation. However, in light of continuing uncertainties about the sustainability of the economic recovery amongst market commentators, the agency notes that a benign or anaemic recovery with little or no recovery in corporate cash flow generation would see the current negative bias of Fitch's ratings coverage maintained or expanded.