Large-deficit India on rocky road: S&P report Global rating agency Standard & Poor’s (S&P) has said the countries with the largest deficits---India and Indonesia---would face hardships in the near term. “The road may be rocky in the near term, particularly for the largest-deficit countries -- India and Indonesia. But we don’t think this is the Asian crisis all over again,” said S&P Asia-Pacific chief economist Paul Gruenwald. In a report titled ‘South and Southeast Asian economies grapple with growth and external financing risks’, S&P said the market turbulence was primarily driven by uncertainties around the timing of “tapering” (reducing bond purchases) by the US Federal Reserve, as well as by recent cuts in the growth forecasts for Asian countries, notably China. “The financial markets appear to be in the midst of pricing in a different path for US monetary policy. During that process, we are likely to see bouts of volatility in emerging Asian economies, along with weaker currencies, lower asset prices and subdued sentiment and growth. But in our view, this is not a repeat of the 1997 Asian financial crisis,” the rating agency said in a release.
Posted on: Wed, 28 Aug 2013 11:09:07 +0000
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