Fitch Ratings says in a new report that the outlook for the highly regulated integrated resorts (IRs) in Singapore and Malaysia is stable despite challenging macroeconomic conditions.
Advertisement
According to the rating agency, India’s positive GDP growth outlook stands out globally.
Fitch today said a structural reduction in the consumer price inflation level, likely supported by the monetary policy framework changes in February 2015, strengthens India’s sovereign credit profile.
However, fiscal consolidation that would cause the general government debt burden to fall more rapidly than expected in the medium term, an improved business environment resulting from implemented reforms and persistently contained inflation, which would support higher investment and real GDP growth could lead to a rating upgrade, the agency said. Additionally, Fitch expects “the aggregate debt-to-EBITDA of the nine publicly-traded health insurers it follows will increase to 3.0 times in 2016 compared with 1.8 at year-end 2015”. “The seventh pay commission’s recommendation of a 23.6 per cent increase in remuneration for central government employees raises doubts about the feasibility of the medium-term consolidation path without any new revenue-generating measures”, Fitch said. When asked if there is a possibility of the roadmap to achieve 3 per cent fiscal deficit target by FY18 being deferred, Rookmaaker said, “I think it’s a possibility”.
“External vulnerabilities have reduced substantially in the past two years, particularly its narrowed current account deficit”.
Fitch estimates that the banks would require around $ 140 billion in total capital to ensure full implementation of Basel III norms by FY19.
Advertisement
“In Fitch’s view, the above strengths should be able to hold them through their recent asset-quality issues but also make them well-poised for growth when the need arises”, the report added. It is also based on the fact the global economy performs broadly in line with the agency’s world economic outlook, including average brent oil price assumptions of $55 per barrel in 2015 and 2016 and $65 in 2017.
