Standard & Poor’s Ratings Services on Tuesday lowered its outlook on Greece’s long-term credit rating, saying that the financially troubled nation will likely need further aid from its international lenders amid a worsening economy and delays implementing harsh austerity measures.
The ratings firm downgraded Greece’s long-term sovereign credit rating outlook to “negative” from “stable.” Its rating remained at “CCC,” well into “junk” status.
Greece’s economy is worsening, so it will likely need as much as 7 billion euros (US$8.7 billion) in additional financing, or 3.7 percent of its GDP, from the EU and the IMF, S&P said.
The move to lower the outlook reflects the possibility that S&P will downgrade Greece’s rating if the nation fails to get additional funding from other eurozone countries and the IMF.
The firm projects that Greece’s GDP will shrink by 10 or 11 percent over this year and next. The EU and IMF have assumed GDP will slow only between 4 percent and 5 percent during that period.
Greece has received two bailouts totaling 240 billion euros from other eurozone governments and the IMF after bond investors would no longer lend it money at affordable rates. In return for the money, Greece is supposed to cut its budget deficit and reform its economy. However, the economy has continued to contract and the new government of Greek Prime Minister Antonis Samaras has said it wants more time to meet some of the conditions.
Even so, S&P anticipates that Greece’s government will find it difficult to make the additional cuts required to satisfy the conditions to get its next slate of funding from the EU and IMF.
“We see the likelihood of shortfalls, owing to election-related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy,” S&P said.
International bailout creditors are closely scrutinizing the country’s lagging austerity and reform program, and a negative report next month would likely lead to the vital rescue loans being halted.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”
HIGH-TECH: As leading-edge process technologies become more complicated, only a handful of players are able to provide design services, the company’s CEO said Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year. The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition. Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology Corp (智原). Faraday said it has secured