S&P downgrades Taiwan rating

S&P downgrades Taiwan rating

TAIPEI: International ratings agency Standard and Poor's has downgraded its ratings outlook on Taiwan to negative from stable on concerns over rising tensions with China and the island's weakening fiscal flexibility.

Standard and Poor's credit analyst Philippe Sachs said the downgrade reflects rising tensions with China which have undercut the outlook, especially in the run up to December parliamentary elections.

The downgrade, the first such action in three-and-a-half years, hit the stock market Wednesday, which lost 0.79 percent, continuing weaker even as many other bourses in the region run at record levels.

Taiwan's economy is forecast to grow 4.0 percent in 2005, compared with a projected 5.6 percent in 2004, according to Standard and Poor's. -- AFP