Emerging markets' debt rating downgraded

Fitch Ratings cut its debt ratings for four Eastern European countries and downgraded the outlook for Russia, South Korea and Mexico as the global slowdown spreads to emerging economies.

Bulgaria, Hungary, Kazakhstan and Romania had their sovereign ratings cut as part of a review of 17 emerging-market economies, Fitch said in a statement yesterday. The outlooks for Chile, Malaysia and South Africa were also lowered.

The US, Japan and the euro zone will all shrink next year, the International Monetary Fund said last week, weakening demand for goods exported from developing nations. The global financial crisis is also making it more difficult for emerging economies to attract foreign capital, putting a strain on their currencies and finances and prompting countries including Hungary and Pakistan to ask the IMF for loans.