Friday, May 27, 2011

Fitch Lowers Outlook on Japan

 Standard & Poor's and Moody's have both already put Japanese government debt on negative outlook.

 Fitch cited the risks associated with the nuclear power plant crisis and noted that the country's gross debt ratio is already the highest of any country it tracks, at 210% of GDP by the end of 2010.

Fitch said that the reconstruction spending after the March 11 earthquake and tsunami were not the primary drivers of its ratings action. But it said that the still-unknown cost of cleaning up the stricken Fukushima Daiichi nuclear power plant and ongoing problems in finding alternate sources of power could force a downward revision in the 2011 growth forecast, currently at 0.5%.

"Failure to strengthen the commitment to fiscal consolidation, or the emergence of substantial additional fiscal or economic costs from the process of reconstruction post-disaster, could trigger a downgrade," Fitch said in its release.

No comments:

Post a Comment