Irish credit rating is downgraded

26 08 2010

The Irish Republic has had its credit rating downgraded by a leading ratings agency, Standard and Poor’s (S&P).

S&P fears that the growing cost of propping up the country’s troubled banking sector will further weaken the government’s finances.

It now thinks that the Irish government will spend 90bn euros ($101bn; £74bn) helping the banks, 10bn euros higher than previous estimates.

The country’s own debt agency described the analysis as “flawed”.

It claimed that S&P’s outlook was based on an “extreme and unrealistic” scenario of the cost of recapitalising the banks and questioned its calculations.

S&P cut the rating one step to from AA to AA-, its lowest since 1995.

This follows clearance earlier this month for an additional injection of 10bn euros into Anglo Irish Bank.

The agency now forecasts that net government debt – the sum of all borrowing – will rise to 113% of GDP in 2010. That would be a substantial increase on the 64% level recorded in 2009.

Continue Reading: http://www.bbc.co.uk/news/business-11081069

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Pakistan seeks IMF loan restructuring after floods‎

25 08 2010

Officials from Pakistan are holding talks with the International Monetary Fund to discuss its $11bn loan package in the wake of the devastating floods.

The IMF’s regional director, Masood Ahmed, told the BBC the organisation wanted to find a way to help Pakistan “through this difficult phase”.

This could include lowering some fiscal targets or allowing Pakistan to apply for emergency natural disaster funding.

Earlier, UN officials described the humanitarian situation as critical.

They said that although the UN had raised 70% of the $460m (£295m) needed for emergency relief, many people had yet to receive any help. In the UK, relief agencies say public donors have now given £29m ($45m).

Government officials and aid agencies in the southern province of Sindh said 80% of those affected had fled their homes.

The Indus river outside the city of Hyderabad is at its highest for more than 50 years and is expected to rise further on Tuesday.

Prime Minister Yousuf Raza Gilani is expected to hold high level talks on Tuesday on Pakistan’s medical needs, amid growing concern of a public health disaster.

Doctors have been overwhelmed by the need in some areas – skin rashes and dehydration are common, many children have diarrhoea and there is concern about the spread of cholera.

Continue Reading: http://www.bbc.co.uk/news/world-south-asia-11060119