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State forays to crowd out private sector credit, Moody’s warns
A subdued revenue performance has pushed the State into borrowing over the years, with the domestic market routinely targeted for funds to plug deficits.
A surge in government borrowing, particularly in the domestic market, is likely to crowd out private sector credit, global sovereign credit rating firm Moody’s has warned.
The Treasury is expected to predominantly rely on the domestic market to meet its fiscal financing needs, piling pressure on private sector players who are at risk of being snubbed by risk-averse banks that prefer ‘safer’ lending to the government.
