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Fitch Affirms Slovakia at 'A+'; Outlook Stable

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Fitch Affirms Slovakia at 'A+'; Outlook Stable

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LONDON, February 28 (Fitch) Fitch Ratings has affirmed Slovakia's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'A+' with Stable Outlooks. The issue ratings on Slovakia's senior unsecured foreign and local currency bonds have also been affirmed at 'A+'. The Country Ceiling has been affirmed at 'AAA' and the Short-term foreign currency IDR at 'F1'.

KEY RATING DRIVERS The affirmation and Stable Outlook reflect the following factors: Slovakia's economic growth is expected to continue outperforming the eurozone average. Against Fitch's latest projection for the eurozone to grow 0.9% in 2014, Slovakia's economy is estimated to grow 2.4%, also broadly in line with the CEE3 (Poland, Czech Republic and Hungary). However, despite a resilient growth profile, Slovakia suffers from structurally high unemployment. At 14%, the unemployment rate is significantly above the 'A' median of 6.4%. Fitch judges the macro-prudential framework to be sound. A solid banking sector and low level of private sector indebtedness remain key strengths for Slovakia's ratings. The banking sector has a high average capital adequacy ratio (17.2%) and a strong domestic funding base, which supports a manageable loan-to-deposit ratio of 82%.
Reuters.com

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