S&P has confirmed its ‘A+/A-1’ rating for Slovakia on a short-term and long-term basis. The international rating agency gave the seal of approval despite warning that public spending could be expected to rise in connection with upcoming elections. On the positive side, it said that “macro-prudential measures” would be effective in reducing private sector lending and that this should cool off what was looking like an overheating economy. “The stable outlook reflects our view that Slovakia’s economic growth prospects are likely to remain solid over the next two years despite its high reliance on auto exports,” wrote S&P in its most recent report. “We could raise our long-term rating if we saw Slovakia successfully navigating its institutional challenges coupled with a sustained improvement in its fiscal metrics, or if per capita GDP improved more rapidly than we currently project.” The primary risk Slovakia currently faces, according to S&P analysts, is that slowing external demand would hit Slovakia’s exports and its current levels of production.
