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S&P's warning to Asia-Pacific

Standard & Poor's, whose rating downgrade of the U.S. created mayhem in markets worldwide, warned on Monday that Asia-Pacific economies, including India, might face a deeper and prolonged impact if the global economy suffered a renewed slowdown.

Without specifically naming India, S&P said the implications for sovereign creditworthiness in the Asia-Pacific would likely be more negative than previously experienced and a larger number of negative ratings actions would follow.

Lowering of credit ratings generally make borrowings costlier and difficult for the country or company being downgraded.

“Fiscal capacities of Japan, India, Malaysia, Taiwan and New Zealand have shrunk relative to pre-2008 level,” it said, adding these countries continue to bear the scars of the downturn. — PTI

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