Finance Ministry: Moody's Downgrades Slovakia's Rating to A3 with Stable Outlook
včera 15:52
Bratislava, December 14 (TASR) - Slovakia’s sovereign credit score was cut one notch by Moody’s Ratings, which cited concerns over political tensions and worsening state debt among reasons for the downgrade.
The move brought the country’s long-term debt rating to A3, with a stable outlook. Another agency, Fitch Ratings downgraded Slovakia’s by one notch a year ago and last week affirmed it at A-.
The current government pushed through a package of measures aimed at reducing fiscal deficit to 4.7 percent of GDP in 2025, from nearly 6 percent this year, stated Moody's. The planned increases in existing taxes and introduction of new levies are expected to slow economic growth and accelerate inflation, while the country’s debt is projected to rise above 60 percent of GDP by 2027.
"Despite the government’s commitment to reduce the deficit in adherence with EU rules, we expect the general government's debt burden to rise further over the next few years to levels above those of similarly-rated sovereigns," stated Moody's, adding that the government’s changes to the judiciary and the media will weaken the checks and balances further.
The Slovak government said that while Moody’s review reflected its efforts to improve public finances, it was surprised that the credit downgrade was primarily based on "political assessment" of state institutions rather than fiscal data.
"The Slovak Finance Ministry considers several judgment opinions of the agency as incorrect, wrongly interpreted and one-sided," it said in reaction to the rating downgrade.
The ministry views it important that the agency finds Slovakia able to continue to attract foreign investments, even when taking into account the risks associated with developments in Germany. The ministry also positively perceives the agency's statement that the strong labour market will support household incomes in the upcoming period.
Moody's expects Slovakia's GDP to grow by 2.1 percent this year, 1.5 percent in 2025, 1.6 percent in 2026 and 1.9 percent in 2027, with the growth being driven chiefly by public investments from EU funds.
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