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S&P downgrades India outlook to negative

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Standard & Poor’s on Wednesday downgraded India’s credit outlook to negative as a weakening economy and gaping fiscal deficit put the country’s prized investment-grade rating at risk.

The agency maintained India’s rating at BBB-, but warned it faces at least a one-in-three chance of losing its status if its financial situation worsens.

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The “BBB-” is one notch above “junk,” which carries an increased risk of default and would see India having to pay higher interest rates on its public borrowing.

“India’s investment and economic growth have slowed and its current-account deficit has widened, resulting in a weaker medium-term credit outlook,” S&P credit analyst Takahira Ogawa said in a media conference call.

“We are revising the outlook on the long-term ratings on India to negative.”

Asia’s third-largest economy is battling stubborn inflation, the widest budget deficit of all major emerging economies, a weak fiscal position and slower growth on the domestic front.

Uncertainty in global markets and Europe’s long-running sovereign debt crisis have added to the pressures.

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India’s benchmark Sensex share index fell 150 points after the S&P announcement before retracing some of its losses to trade down nearly a percentage point, or 133.21 points, at 17,090.98.

Finance Minister Pranab Mukherjee, seeking to reassure investors, said the government was “confident of overcoming difficulties”, telling reporters “there is no need for panic”.

India’s economic reform process has been paralysed by a string of political scandals that has beset Prime Minister Manmohan Singh’s Congress-led government.

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S&P in 2007 hiked India’s credit rating to investment-grade, a move that paved the way for global funds to invest in government bonds and other debt in the country.

But now, Ogawa said, “there’s at least a one-in-three chance we may move the rating down in the next 24 months if the external position deteriorates, growth prospects diminish or progress on fiscal reforms remains slow.”

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India’s fiscal deficit was 5.9 percent of gross domestic product in the fiscal year ended on March 31, swelled by social spending programmes targeting the country’s hundreds of millions of poor.

The government hopes to trim the deficit to 5.1 percent of GDP this year, but analysts are sceptical given the government’s record borrowing plans.

India’s economy is forecast to expand around 7.6 percent this fiscal year, from the 6.9 percent estimated for last year, the second slowest pace in a decade.

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S&P’s negative outlook came as Moody’s Analytics, part of credit analysis giant Moody’s Corp, said India’s economy was growing well below potential.

“The government has lost all momentum” on economic reforms, Glenn Levine, senior economist at Moody’s Analytics, said in an investor note.

[Indian woman at her laptop via Shutterstock.com>]


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LISTEN: Mourners sing ‘Amazing Grace’ outside the Supreme Court to celebrate Ruth Bader Ginsburg

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Heartwarming videos were shared on social media on Friday night showing the spontaneous gathering at the Supreme Court following the death of Justice Ruth Bader Ginsburg.

The large crowd, with many people wearing masks, sang the hymn "Amazing Grace."

Here are some of the videos of the scene:

A moving moments as dozens join in to sing “Amazing Grace” on the steps of the Supreme Court. pic.twitter.com/NGZyZi4YR4

— Mike Balsamo (@MikeBalsamo1) September 19, 2020

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2020 Election

Here’s how Mitch McConnell could lose his leverage to replace Ginsburg after November

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According to a report in AZCentral, Senate Majority Leader Mitch McConnell's plan to rush through a replacement for the late Supreme Court Justice Ruth Bader Ginsburg could encounter an unexpected roadblock if he tries to hold a confirmation vote after the election.

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After prostitution arrest, Seattle police captain got preferential treatment from fellow officers

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SEATTLE — Late on a Wednesday last November, a middle-aged man in an Audi sport utility vehicle pulled into a lot off Aurora Avenue North and allegedly agreed to pay $40 for sex to a police decoy posing as a prostitute.The undercover cop silently gave a signal, and a team of Seattle police officers watching from nearby swooped in. They soon realized their vice sting had netted one of their own: an out-of-uniform Seattle police captain named Randal Woolery.Police bodycam videos of Woolery’s arrest that night show that after officers handcuffed him and read him his rights, he turned to a supervi... (more…)

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