Fitch upgrades India’s sovereign outlook to ‘stable’

Fitch Ratings has revised India’s sovereign credit outlook to ‘stable’ from ‘negative’ and affirmed the ‘BBB-’ rating assigned earlier.

Why this upgrade?

Fitch revised the outlook to stable after noticing the steps taken by the government to control the budget deficit, including the commitments made in the 2013-14 budget, as well as some, albeit limited, progress in addressing some of the structural hindrances to investment and economic growth. Although slow and modest, a recovery in the real GDP growth has been forecasted with real GDP expected to expand 5.7% and 6.5% in 2013-14 and 2014-15, respectively.

Key Strengths:

  • Fitch has pointed to India’s inherent economic strength despite declension in the Current Account Deficit (CAD), which in part has been due to a surge in gold imports.
  • India’s foreign debt is moderate and RBI’s international reserves, which stood at $288 billion which serve as shock absorber in case of any external impact.
  • India’s investment-grade ratings are supported by high domestic savings rates that limit the reliance on foreign savings for private investment and fiscal funding, as well as by a relative long maturity of government debt issued in its own currency.
  • Success in containing the upward pressure on the Central government budget deficit in the face of a weaker-than-expected economy.
  • Government has started to address structural factors that have dampened the investment climate and growth prospects, notably regulatory uncertainty, delays in approvals of investment projects and supply bottlenecks in the power and mining sectors.

39th G8 summit held in Northern Ireland

The 39th G8 summit was held on June 17-18, 2013 at Lough Erne, Northern Ireland of United Kingdom. The summit was presided over by the U.K.

The official theme of the summit was tax evasion and transparency. However, the Syrian civil war dominated the talks. A seven-point plan on Syria was agreed after much debate. Other agreements included a way to automate the sharing of tax information, new rules for mining companies, and a pledge to end payments for kidnap victim releases. The United States and the European Union agreed to begin talks towards a broad trade agreement.

Besides eight nations, Jose Manuel Barroso, the President of the European Commission, and Herman Van Rompuy, the President of the European Council were also a part of the meet.

Who are the members of G8?

  • G8 nations are Canada, France, Germany, Italy, Japan, Russia, the USA and UK.