Standard & Poor’s Ratings Services announced on Wednesday, December 15, that it had affirmed its ‘A+’ long-term and ‘A-1’ short-term sovereign credit ratings for the Slovak Republic, with an outlook of ‘stable’. The transfer and convertibility assessment on Slovakia is ‘AAA’.
The ratings for Slovakia reflect the agency’s view of the country’s solid economic growth potential and the government’s moderate, but rising, debt burden. These strengths are offset by the cyclical nature of the Slovak economy and a high level of structural unemployment. “The main risk we see to Slovakia's sovereign creditworthiness stems from the deterioration in the country's public finances since 2008,” said Standard & Poor’s credit analyst Kai Stukenbrok. The agency added that following an 8-percent GDP fiscal deficit in 2009, it expected a similar deficit in 2010.
Standard & Poor’s identified risks on the fiscal side, including a weaker-than-expected economic performance and public and political opposition to proposed austerity measures. On the assumption that the primary balance, GDP growth, and real interest rates remain at current levels, gross general government debt should remain below 50% of GDP through to 2013, it predicted.
Compiled by Zuzana Vilikovská from press reports
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16. Dec 2010 at 14:00