Two of the so-called Bric economies were under the microscope today as India faced a credit ratings downgrade and Brazil prepared to cut interest rates for the 10th month in a row.
The Brics — Brazil, Russia, India and China — have weathered the global economic storm in far better shape than the West, but the latest concerns come amid worries over slowing growth in China, the world’s second-biggest economy.
Standard & Poor’s said India faced a one-in-three chance of a ratings downgrade within the next two years despite a drive for economic reforms — including a controversial opening up of its retail sector to foreign operators.
“A downgrade is likely if the country’s economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow,” S&P warned.
Meanwhile analysts said Brazil could cut interest rates today despite the threat of rising inflation. Brazil’s economy is starting to pick up after a year of stagnation, although the strength of that recovery remains unclear.
