Brazil DowngradedBusiness News

September 10, 2015 18:36
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S&P has downgraded Brazil's sovereign credit rating to junk to BB+, from BBB-, on mounting political problems that have shattered the economic policy of the country. The agency has retained China's 2015 GDP growth at 6.8% and lowered those for 2016 to 6.3% and 2017 to 6.1%.  India and China look more stable in terms of the growth outlook. India will be the fastest growing major economy, ahead of China, which is expected to clock 6.8% this year.

"When in terms of tighter global liquidity and risk-off sentiment, clearly, India is still exposed, perhaps not as much as other emerging markets, but it is exposed to these headwinds," says Rahul Ghosh, VP & Senior Analyst, Moody's Investors Service.

"We have seen that in the market volatility that we have seen over the last few weeks. In fact, we have seen net equity outflows and net debt outflows out of India. But, you are right in the sense that the story has gone from India's macro adjustment to the growth recovery," he added.

"Now, when we look at that from an EM context, that is still suggesting that India will be a global growth outperformer over the next couple of years and that is a key pillar of support for our positive outlook on our Baa3 rating that we hold for India at Moody's," Ghosh said.

By Premji

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Tagged Under :
Standard and Poors  Brazil  India  China  Moody