Economic downturn raises default risks, puts stimulus package in focus

The credit market has been stung by a yearlong shadow banking crisis that started with shock defaults last year by IL&FS group

Investors are awaiting stimulus measures from the Indian government as a gloomy economic outlook adds to mounting credit market woes and raises fears defaults will spread.

The government is planning measures to boost the economy and may announce some steps this week to help demand for housing, automobiles, and to spur small businesses, an official said on Friday. Credit profiles of the nation’s companies worsened to a 19-month low in July, according to a Care Ratings index that tracks 1,601 local firms.

The credit market has been stung by a yearlong shadow banking crisis that started with shock defaults last year by