Growth in large Asia Pacific economies like China, India, and Indonesia will be less affected as their economies are more domestically oriented, said S&P Global Ratings on Thursday.
India is facing a mixture of factors that may shake its sovereign credit metrics and amid external turbulence, its foreign exchange reserves are falling, while the current account deficit is rising, said S&P Global Ratings on Wednesday.
According to the global credit rating agency, Vedanta Resources' credit profile will not be weighed down by the group's $20 billion semiconductor manufacturing venture as the investment will be made outside of the company.
S&P said it expects the second wave to impair the performance of Indian financial institutions in the first half of fiscal year 2022, with much resting on the effectiveness of government measures to address this problem.
Manufacturing output was about 3.5 per cent higher in October 2020, compared to the year-ago period, while the output of consumer durables rose by almost 18 per cent.
The US-based rating agency said it has always viewed the Indian government as highly supportive of the banking sector as it has consistently supported weak commercial banks by promoting the merger of distressed institutions with stronger lenders.
It said the 23.9 per cent contraction in the April-June quarter was larger than expected.
The asset monetisation was despite operations that are trending weaker than anticipated for the fiscal year ending March 31, 2021.
It has forecast a 5 per cent contraction in the economy in fiscal 2021.
In its report titled 'Asia-Pacific losses near USD 3 trillion as balance sheet recession looms', S&P projected the region's economy to shrink by 1.3 per cent in 2020, but grow by 6.9 per cent in 2021.
