India faces at least “a one-in-three” chance of losing its prized sovereign grade rating, global ratings agency Standard and Poor’s (S&P) has warned, in another blow to the scandal-tainted Indian Congress government.
The announcement late on Friday comes after finance ministry officials have been arguing for a ratings upgrade, saying the government has been taking strong steps to curb India’s financial deficit and promote investment.
India’s “BBB-minus” investment rating is already the lowest among its BRICS peers Brazil, Russia, China and South Africa, and cutting it to “junk status” would push up the country’s hefty borrowing costs as it would signal higher risk.
Photo: Bloomberg
“There is at least a one-in-three chance that we will lower the ratings in the next 12 months,” S&P said late on Friday, adding that “risks to India’s growth from stalled reforms in parliament still tilt the credit risks to the downside.”
The warning from S&P, which cut its outlook on India’s “BBB-minus” rating to negative from stable last year, came after parliament was forced to adjourn early this month amid opposition uproar over corruption scandals.
The shutdown stalled the economic reform drive by Indian Prime Minister Manmohan Singh’s minority government, which has been hobbled by a string of graft controversies with two cabinet ministers entangled in scandals quitting late last week.
The government has opened up the retail and aviation sectors to wider foreign investment and partly freed fuel prices. However, it has been striving to pass other bills to open the the insurance and pension sectors to more overseas investment and streamline industrial land acquisition to spur economic growth.
The agency said it may also cut India’s ratings if it concludes that Asia’s third-largest economy will not revert to higher 7 percent to 8 percent growth levels notched up earlier in this decade.
India’s growth right was bumping along at 5 percent for the last financial year to March this year, the lowest level in a decade, but the government expects it to pick up to 6 percent this year and is targeting 7 percent next year.
Also despite government efforts to cut red tape in implementing long-delayed infrastructure and power projects, its “success in raising investment growth remains uncertain,” credit analyst Takahira Ogawa said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day