Author: Blažej Kupec, STA

Agency Moody’s is saying that political climate in Slovenia improved, which increases the probability of realization of further economic and fiscal reforms.

Moody’s upgraded its rating on Slovenia from Ba1 to Baa3 with a stable outlook. Raising the country’s credit rating from speculative to investment grade is a result of a progress in fiscal consolidation and the stabilization of the banking sector.

Improved political climate in Slovenia increases the probability of realization of further economic and fiscal reforms, whereas stabilization of the banking sector reduces the risk of further liabilities on the government’s balance sheet.

Moody’s also expects Slovenia’s policies in support of these positive developments to remain in place and that the country’s debt burden would slowly start to decline as early as this year.

According to analysts of the agency Slovenian government is expected to bring the budget deficit below 3% of GDP this year.

Slovenia in investment grade territory according to all three agencies

By raising their ratings the three largest credit rating agencies in the world – in addition to Moody’s, also Standard & Poors and Fitch – are saying that Slovenian debt is no longer classified as speculative investment.

At the end of December Standard & Poor’s upgraded Slovenia’s rating from negative to stable and confirmed the long-term and short-term credit rating at A- and A-2, whereas Fitch estimates Slovenia’s debt at BBB+ (the third-lowest investment-grade rating).

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