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Moody’s cuts Slovakia’s rating outlook

MOODY’S Investor’s Service cut the outlook on Slovakia's A1 government bond ratings from positive to stable on March 27, reported the SITA newswire.

MOODY’S Investor’s Service cut the outlook on Slovakia's A1 government bond ratings from positive to stable on March 27, reported the SITA newswire.

“Today's action reflects Moody’s belief that although Slovakia's creditworthiness has benefited from structural improvements in recent years, the risks to the country’s investment- and export-led growth model have increased in the current crisis,” said Dietmar Hornung, a Vice President-Senior Analyst in Moody's Sovereign Risk Group, as quoted by the SITA newswire. “In particular, Slovakia's economic strength is being affected by its considerable exposure to EMU [the EU’s European Monetary Union] recession and weak global demand, the automotive industry, and the depreciation of other currencies in the region, a phenomenon that impairs Slovakia's competitiveness vis-a-vis those countries.”

The change in the outlook on Slovakia’s A1 government bond rating from positive to stable is just superficial, according to analysts. The fact that the change in the outlook was from positive to stable means that Moody’s does not expect further worsening of the country’s credit-worthiness but does not expect improvements as in the past, said analyst Michal Mušák from Slovenská Sporiteľňa, adding that Slovakia’s rating is still better than those of Poland, Hungary, the Baltic and Balkan countries. Prime Minister Robert Fico does not pay much attention to Moody’s Investor’s rating, saying that opinions about the importance of the rating agencies have changed considerably.

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