The European Commission on Friday revised its 2013 GDP growth forecasts for the euro area and is now projecting a 0.3 percent contraction, rather than the 0.1 percent expansion it forecast just three months ago.
Moody's announced it was also credit-negative on all eurozone sovereign debt.
Dagong said it believed that measures to maintain high gross debt levels through continuously depressing interest rates and injecting liquidity cannot lead to a powerful expansion of a debt-ridden real economy.
"Debtors are extremely sensitive to interest rates and new credit risks will surface if rates continue to rise," it said.
Confronted with a credit war, emerging economies and low-income countries had again resorted to loosening monetary and fiscal policies, it added, in order to prevent a deterioration of their regional economies, which could also pose new challenges to sovereign credit risk.
It said that China, on the other hand, had consolidated its sovereign credit strength by gradually activating domestic demand to achieve sustainable growth.
The ratio of China's government debt as a percentage of its GDP reached a peak of 33.5 percent in 2010, and will gradually fall to 24 percent in 2014, according to Dagong estimates.
But Zong Liang, deputy head of the international finance research institute of the Bank of China, said China still needs to take active measures to deal with the quantitative easing policies of developed countries.
"We should preserve the continuity and stability of our monetary policy while still paying close attention to the inflow of hot money," he wrote in for Securities Daily.
Zong suggested that the government could lower the threshold of commodity imports to lower prices and guard against possible price hikes triggered by quantitative easing.
China should continue pushing forward the market-oriented exchange rate of RMB and allow more flexibility, to prevent global capital speculation, he added.
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