Ljubljana, 25 January (STA) - International credit rating agency Fitch Ratings has affirmed Slovenia's issuer default ratings at $AA$ with a stable outlook, the Finance Ministry said on Monday. Fitch also confirmed for 2010 the short-term foreign currency rating at $F1+$.
The rating for Slovenia continues to be based on the country's relatively well-diversified economy and a stable, transparent political system. Achievements include eurozone membership, which is an asset for Slovenian public finance and country risk evaluation, the ministry recaps Fitch's report.
The ministry quotes Fitch analyst Chris Pryce as saying that past fiscal consolidation has given Slovenia the elbow room needed to take on an unexpectedly serious recession, while its public finance indicators have remained within "AA" scope despite growing deficit and public debt.
According to Pryce, renewed efforts for fiscal consolidation will be of key importance for stabilisation and a curbing of public debt after 2011.
A sudden crisis on Slovenia's main export markets has led to a more than 7% drop in GDP in 2009. However the actual decline was short, lasting only in the final quarter of 2008 and the first quarter 2009, Fitch pointed out.
Expansionist measures adopted by the government added around 4% of GDP to the total public finance deficit, which increased to around 5.5% in 2009. Fitch expects the deficit to stay at this level in 2010.
The country's public debt rose to 34% of GDP in 2009, with Fitch projecting a further increase to 44% in 2011.
The problem of the ageing population is another continuing danger for the long-term stability of public finance, which is why the agency sees a need for timely and decisive measures.