S&P affirms Slovakia at A/A-1, outlook stable.

By bne IntelliNews August 7, 2012
Standard & Poor's Ratings Services said it has affirmed Slovakias A/A-1 long- and short-term sovereign credit ratings with stable outlook, saying it expects the government to keep its pledge of cutting the budget deficit to below 3% next year. The ratings reflect our view of Slovakia's decade-long track record of economic and fiscal reforms, its solid growth potential, and its moderate (although rising) government debt burden, the agency said in a statement. It added that the strengths are offset by the central European countrys high structural unemployment and by its wealth levels that still lag behind those of its eurozone peers. S&P expects Slovakias new leftist government to continue its fiscal consolidation efforts and to stabilise government debt-to-GDP ratio. The agency does not expect the new austerity measures, which include removal of the flat tax regime and higher taxes for banks and regulated industries and are unpopular with the targeted industries, to affect negatively foreign direct investment or Slovakia's growth prospects, given its attractiveness as a manufacturing platform. S&P expects Slovakias economic growth to be at around 2% this year, driven mainly by exports, while real consumption is seen remaining weak. The countrys medium-term growth is forecast to be driven also by continuing foreign investment inflows that should boost industrial capacity. Slovakias gross government debt burden increased by 16% of GDP during 2008-2011, but remained below 50% of GDP, S%P said, adding that it expects it to keep staying below 50%. Slovakias banks overall exposure to peripheral European government bonds is negligible, and the countrys banking sector remains strong and adequately capitalized, the ratings agency noted. The banking sector is 90% foreign-owned, but with a loan-to-deposit ratio of about 80%, it is predominantly deposit-funded.

Related Articles

Slovakia one of possible locations for new BMW plant.

German car maker BMW considers building a new plant in eastern Europe and Slovakia is one of the potential locations, Hospodarske Noviny business daily reported citing BMW's board member Ian ... more

Slovakia jobless rate edges down to 14.7% in February 2013.

Slovakia's unemployment rate in February 2013 fell for the first time in six months going down to 14.7% from 14.8% in January when it reached its highest level in more than 8.5 years, data from ... more

Frances CCN Group considers new plant in Slovakia - report.

France-based CCN Group, a supplier of components for turbines and automobiles, considers building a new plant in Slovakia in the town of Belusa, Hospodarske Noviny daily reported citing unnamed ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss