S&P Lowers Slovakia's Rating by One Notch to 'A' from 'A+', Outlook Stable

Bratislava, 25 April (TASR) - The Standard and Poor's (S&P) rating agency has lowered Slovakia's rating from 'A+' with negative outlook to 'A' with stable outlook, the Finance Ministry reported on Friday (24 April). The ministry stated that this move was expected, as S&P's previous rating was two notches higher compared to other agencies. The main reasons primarily include negative external factors slowing down the economy, such as problems faced by Slovakia's largest trading partners in the EU, energy risks, the oil crisis, and global uncertainty. The agency was also concerned about the 13th pension payment. In addition to external macroeconomic factors, S&P also cited government decisions regarding "generous social transfers" as one of the reasons for the downgrade. Although acknowledging the fact that the 13th pension payment was specifically pinpointed by S&P, Finance Minister Ladislav Kamenicky (Smer-SD) said that "care and support for seniors is a priority for Prime Minister Robert Fico's (Smer-SD) government, and it's also included in its Manifesto". "I want to emphasise that a socially oriented policy is what we've openly advocated for a long time, with the 13th pension payment being one of its main pillars, and we're not going to change that," stated Kamenicky. The Finance Ministry reassured that, according to its economists and the representatives of the Debt and Liquidity Management Agency (ARDAL), the lowered rating will not affect interest rates on government bonds. According to the ministry, S&P noted that "the debt profile remains favourable, with long duration and relatively favourable funding conditions". "For a long time, S&P's rating remained two notches above the ratings from other agencies. Despite the current change, it's still one notch better than the ratings from Moody's and Fitch," stated Kamenicky. "Furthermore, we had already expected this move some time ago due to the situation in Europe and the world, and investors have also been taking this into account for a long time, so the decision has no impact on Slovakia's creditworthiness," he added. Of the three major rating agencies, Moody's also lowered Slovakia's rating at the end of 2024, by one notch to A3 with stable outlook. jrg