London: Amid mounting concerns about the European debt turmoil hurting emerging economies, rating agency Fitch has said India figures among the "relatively less exposed" nations to the global growth shocks.
"At a macroeconomic level, Fitch considers China, India and Indonesia to be relatively less exposed to global growth shocks compared to the smaller and more open economies of Thailand, Malaysia and Mongolia (in Asia)," the rating agency said.
The spiralling debt crisis in Europe and concerns about the economic health of the US have cast a shadow on emerging markets as well. India and China have been the major drivers of global economic recovery post the meltdown of 2008.
In a statement issued on Wednesday, Fitch noted that China, India and Indonesia are not "totally isolated" from the global shocks. "... but we believe they have sufficiently developed domestic demand characteristics to offset the worst of any euro zone contagion for the majority of corporates whose
business is largely domestic or regionally focused," it said.
Pointing out that the economic fallout from the current eurozone crisis should be manageable for most Asian corporates, Fitch said that first route by which the turmoil could hit Asia is reduced demand for exports from Asia.
"But those companies primarily reliant on exports to European countries represent a relatively small group. That's because a significant amount of trade in Asia and particularly growth in that trade over the last few years, has been within the region," it added.
Regarding possible adverse impact on access to funding for Asian corporates, the agency noted that most of these entities are in a stronger position now than there were going into the 2008 downturn.
"While aggregate forecast free cash flow for rated entities across all corporate sectors in 2012 is broadly zero, by far the largest contributor to this position is capex, which accounts for 80 per cent of cash flow from operations.
"A large proportion of capex plans could be scaled back considerably if need," it said.
Against the backdrop of steep fall in domestic stock markets, India's Finance Minister Pranab Mukherjee yesterday said the country's growth fundamentals are strong and "they look more attractive in a world (which is) confronting
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Updated Date: Dec 20, 2014 07:17:03 IST