Slovakia received a great evaluation of finances, Matovič is looking forward: We are happy
The international rating agency Fitch Ratings confirmed Slovakia’s credit rating at level A on Friday with a stable outlook. According to the most supported competitive exports, the current assessment of the Slovak Republic is stable foreign direct investment and one policy framework.
As further informed by the Ministry of Finance (MF) of the Slovak Republic, Fitch emphasized the political framework of Slovakia, which is supported by membership in the European Union and the euro area. The agency also points to the fact that the level of Slovakia’s state debt is stable. In 2021, public debt relative to gross domestic product (GDP) peaked at 62.5%, but strong growth is expected to reach 20% of GDP in 2025.
According to Fitch, fiscal performance was better than expected due to higher revenues and lower capital expenditures in 2021, with the deficit estimated at 6.3% of GDP. In 2022, it should fall slightly to 5.3% of GDP. The banking sector, which is predominantly in the foreign sector, is stable, profitable and has good asset quality.
“We are pleased that the independent rating agency highly positively evaluates Slovakia ‘s creditworthiness as well as the quality of public finance management. in a situation of historically extremely complicated concurrence of pandemic crisis and war conflict on the eastern border“Minister of Finance Igor Matovič (OĽANO) responded.
On the other side, Fitch considers the risk of rising inflation, the pressure on public finances due to the Russian invasion of Ukraine, as well as Slovakia’s high dependence on energy imports from Russia to be weaknesses of the Slovak Republic. The agency expects economic growth to slow from 3% last year to 2% in 2022. Public investment is expected to boost in the second half of the year, in line with the higher uptake of the 2014-2020 multiannual financial framework and the Recovery Plan, but this should lead to a recovery. economy. In combination with the post-pandemic normalization of foreign trade, economic growth is expected to accelerate to 4.6% in 2023.