Fitch Ratings on Friday maintained Slovakia’s sovereign ratings with ‘stable’ outlook as the economic growth is set to pick up further. A solid banking sector and gradual improvement in external position also support its ratings.
The agency also affirmed ‘AAA’ rating on Denmark on Friday citing its macro-financial stability.
Slovakia’s sovereign rating was affirmed at ‘A+’. The agency forecast 2.3 percent growth in 2014, followed by average growth of around 3 percent in 2015-2016.
Slovakia suffers from few macroeconomic imbalances, although high structural unemployment remains a weakness. A manageable general government fiscal deficit and forecast stabilizing debt-to-GDP ratio also support the ratings, it said.
The agency projects Slovakia’s current account to remain in surplus in 2014-2016, averaging 3 percent of GDP, up from 2.1 percent in 2013.
The ‘stable’ outlook reflects Fitch’s assessment that upside and downside risks to the rating are evenly balanced.
In a separate report, Fitch said Danish public finances are consistent with the ‘AAA’ median with a forecast budget deficit of 1.3 percent of GDP and EU debt of 44.1 percent of GDP in 2014.
The fiscal framework is characterized by compliance to the Danish budget law and EU fiscal compact and stability and growth pact.
The economic growth is expected to accelerate to 1.5 percent in 2014 driven by stronger private consumption and the recovery of private investments.
Moreover, large Danish banks have generally remained resilient in terms of asset quality, capitalization and liquidity. The ‘stable’ outlook indicates that the downside risks to the sovereign’s ‘AAA’ rating are not material.
The material has been provided by InstaForex Company – www.instaforex.com