China's Dagong lowers Japan credit rating
0 
Chinese ratings provider Dagong Global Credit Rating Co. Ltd., on Thursday cut its rating for Japan's local and foreign currency sovereign credit by one level to A+ and AA- respectively.
The rating agency said the downgrade took into consideration Japan's political situation, economy, fiscal revenue and expenditure, as well as debt revenue.
Dagong estimated Japan's economy will grow at an average rate of 1.4 percent from 2011 to 2015, as the economy are affected by factors including the global inflation, the March 11 earthquake and a limited room for further monetary and fiscal policies.
The rating agency said the Japanese government's fiscal revenue would not improve significantly, which would increase the risk of debt repayment.
The fiscal expenditure accounted for 20.2 percent of Japan's GDP in 2010. The proportion would not decrease from 2011 to 2015, the agency estimated.
Expecting a mild recovery of the Japanese economy and no significant deterioration of Japan's sovereign debt financing within the next 12 months, Dagong put the country's credit outlook as "stable."
Founded in 1994, Dagong is a pioneer in creating credit rating standards on industries, regions and sovereignties in China.
