Mumbai, Jul 4 (IANS): A majority of Indian and foreign investors consider that high oil prices have emerged as a significant risk to the country's economy, Moody's Investors Service said on Wednesday.

The US rating agency's report is based on a survey of 175 respondents, including from over 100 financial institutions at the annual India Credit Conference in Mumbai and Singapore held in June.

Investors were asked questions on issues like top risks facing the Indian economy, fiscal deficit, the recapitalizsation package for public sector banks and credit conditions for Indian corporates among others.

"Most of the respondents highlighted high oil prices as the top risk while 30.3 per cent of those in Singapore picked rising interest rates as the next top risk and 23.1 per cent of those in Mumbai picked domestic political risks as the second top risk," Moody's Vice President Joy Rankothge said in the report.

Most respondents said they believed India would not meet the central government's fiscal deficit target of 3.3 per cent of GDP for the current fiscal.

While only 23.3 per cent of the investors in Singapore and 13.6 per cent in Mumbai felt that the fiscal targets would be achieved, 84.7 per cent in Mumbai and 76.7 per cent in Singapore expected some fiscal slippage.

On the government's bank recapitalisation plan, 85.7 per cent in Singapore and 93.6 per cent in Mumbai thought that it was insufficient to resolve the non-performing assets (NPA), or banks' bad loans, challenges.

In this connection, while 59.6 per cent of the attendees in Mumbai thought that banks will be unable to raise capital from the markets, 32.1 per cent in Singapore felt the same way.

Respondents in both locations said funding conditions will be one of the top factors driving the outlook for non-financial corporates - 38 per cent in Mumbai and 34.6 per cent in Singapore.

According to the report, 28 per cent of respondents in Mumbai selected the resumption of capital investment as the second key factor affecting credit outlook while only 11.5 per cent felt this way in Singapore.

In contrast, 26.9 per cent of the Singapore attendees selected government policy and reforms as the second most important factor affecting the credit outlook, compared with 22 per cent in Mumbai.