Fiscal gap is a concern for India: Fitch
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Reuters
Posted: Nov 10, 2008 at 1322 hrs IST

Mumbai, November 10: India's large foreign exchange reserves are helping keep its ratings outlook from being downgraded, but a widening fiscal deficit and outflows from its stock market are warning signs, Fitch Ratings said on Monday.
James McCormack, managing director of Asia-Pacific sovereign ratings at Fitch, told Reuters that India's low level of exposure to global capital flows compared to other regional economies was also shielding Asia's third-biggest economy from the worst effects of the global financial crisis.

"Capital outflows from the stock market is making the economy vulnerable, but its high level of foreign exchange reserves has meant that its economy is in a better shape than some of its Asian peers," McCormack said in a telephone interview.

On Monday, Fitch affirmed the country's "BBB- minus" rating for both local and foreign currency debt, and kept the outlook on its local currency rating outlook at negative and foreign currency outlook at stable.

Fitch downgraded ratings for four Eastern European countries to below investment-grade, and revised its outlook on a handful of emerging markets due to the adverse impact of a looming global recession.