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S&P Global Ratings affirmed the investment grade rating of Abu Dhabi, citing the strength and resilience of its economic fundamentals and the emirate’s large fiscal buffers that are supported by revenue from the hydrocarbon sector.
The AA/Stable/A-1+ rating and stable outlook of the emirate reflects the rating agency’s expectation that despite oil price fluctuations, Abu Dhabi s fiscal position will remain robust over the next two years and the emirate has a very strong capacity to meet financial commitments, S&P said in a statement on Tuesday.
“The exceptional strength of the government s balance sheet provides a buffer to counteract the effect of oil price swings and the effect of Covid-19 on economic growth, government revenue, and the external accounts, as well as the effect of high geopolitical uncertainty in the Gulf region,” the ratings agency said.
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A government debt restructuring in Lebanon involving write-downs of its bonds could trigger a sovereign doom loop that would prove costly to the Lebanese banks holding these assets, S&P Global Ratings warned.
Although the true extent of banks losses will only materialise once the government restructures its liabilities, the cost of a default could surpass 100 per cent of the country s gross domestic product, the ratings agency warned in a report titled
Calculating The Cost of Lebanon s Bank-Sovereign Doom-Loop.
Under its most pessimistic scenario, lenders face asset write-downs equating to 134 per cent of the country s GDP. Without a resolution, Lebanese banks could find it difficult to sustain their operations as deposit outflows continue and foreign correspondent banks sever relationships, S&P Global Ratings credit analyst Zahabia Gupta, said. Failure to restructure the financial system could leave Lebanon with banks unfit to support an economic recovery.
Yield nerves
In a bid to clean up election funding, the government had in January introduced electoral bonds that can be bought from specified branches of State Bank of India and used to donate money to political parties. Photo: iStockphoto
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S&P Global Ratings on Wednesday warned that the Philippines and India are the most vulnerable to rising yields on US Treasury bonds, amid global fears that President Joe Biden’s $1.9 trillion stimulus will spark inflation and prompt the Federal Reserve to tighten money. This, some worry, will set off 2013-like capital outflows from emerging markets.
India to be among fastest growing emerging economies in FY22, rating hinges on deficit, debt
S&P said India s economy has stabilised over recent months, with progressively better manufacturing, services, labour market, and revenue data.
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NEW DELHI: S&P Global Ratings on Wednesday said India will be one of the fastest growing emerging market economies with a 10 per cent growth in the next fiscal, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden.
S&P Director, Sovereign & International Public Finance Ratings, Andrew Wood said the forecast for India in 2021 is on stronger side and shows that a lot of economic activity, which was frozen last year, is coming back on line to normalisation thereby brightening the growth prospects, as well as structural strengths of Indian economy coming back to the fore.