Japan`s credit rating downgraded by Standard & Poor`s
Baku, January 27 (AZERTAC). Rating agency Standard & Poor`s (S&P) has downgraded Japan`s credit rating from AA to AA-, citing Japan`s worsening debt situation for the move.
It said it expected Japan`s debt, which already stands at almost twice the country`s annual economic output, to continue rising for about 15 years.
It added that the government "lacked a coherent strategy" for tackling the debt problem.
Separately, figures showed Japan`s export growth accelerating in December.
"The downgrade reflects our appraisal that Japan`s government debt ratios - already among the highest for rated sovereigns - will continue to rise further than we envisaged and will peak in the mid 2020s," S&P said.
It forecast that the government`s fiscal deficit - the amount by which the government`s expenditure exceeds its revenues each year - would fall "only modestly" from an estimated 9.1% of GDP in the 2010 financial year, to 8.0% in 2013.
In addition, S&P raised concerns about Japan`s "persistent deflation" and "fast-ageing population", which places a huge burden on the state through benefit payments.
Japan`s exports grew by 13% compared with a year earlier, the finance ministry said, an improvement on the 9.1% growth seen in November.
Strong demand in North America for Japanese cars boosted exports.
Exports are key to Japan`s economy and analysts say December`s figures bode well for the country`s recovery.
November was the first month in nine months that the rate of export growth had increased.
The slowdown between February and October, in part due to a strong yen - which makes exports more expensive - had raised concerns about Japan`s economic recovery.
However, the latest export figures have helped to ease some of these fears.
Exports to China grew by 20.1%, while those to the US rose 16.5%.
For 2010 as a whole, exports grew by 24.4%, the first annual expansion in three years.
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