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Standard & Poors: Our economic outlook is stable again

Last update: 19.05.2023 23:00

The Slovak economy has received its next rating, which brings good news. Standard & Poors (S&P) has maintained Slovakia's rating at A+ and changed the outlook from negative to stable. The adjustment comes at a time of peak crises and inflation, which is a positive signal for investors. However, the change in the outlook already foresees a gradual recovery of public finances. 

The 'A+' rating with a stable outlook mainly reflects Slovakia's ability to reduce its dependence on imports of Russian commodities. “The Slovak economy has been remarkably resilient to the sharp rise in energy prices as a result of the Russian-Ukrainian conflict. At the same time, the recent launch of a new unit at the Mochovce nuclear power plant makes Slovakia almost self-sufficient in electricity," the S&P assessment report says.

In its report, the agency welcomes the ECB's effective monetary policy and the low cost of government funding. Moderate external debt and limited balance of payments risk are in our favour as well.

At the same time, the agency's analysts predict that our economy will grow 1.2% faster than expected in 2023. More favourable external demand and easing supply chain pressures should lead to higher export growth. It appears that the labour market should also remain relatively stable. The general government net debt will remain moderate and below 50% of GDP until 2025, according to the agency. 

“As Minister of Finance, I am sincerely pleased with the positive assessment. This report reflects the resilience of our economy, gives us more free rein in preparing the necessary measures, but at the same time anticipates an early start to the recovery of public finances. The improvement in the outlook is primarily due to the confidence of the rating agency that we will present such a plan,” said Slovak Finance Minister Michal Horváth.

Similarly to the Ministry of Finance of the Slovak Republic, the rating agency also sees risks already this year. This is primarily the negative impact of inflation, which is still at relatively high levels in Slovakia, mainly due to high energy prices. And it is high prices that will continue to reduce consumption of private households.

Government measures to help households and businesses have increased this year's fiscal deficit. In 2023, according to the agency, it should reach 5.5% of GDP from last year's 2%.

Press Department
Ministry of Finance of the Slovak Republic