Research Update: Slovenia 'A+/A-1' Ratings Affirmed; Outlook Remains Positive

Rating Action

On 14 December 2018, S&P Global Ratings affirmed its 'A+/A-1' long- and short-term foreign and local currency sovereign credit ratings on Slovenia. The outlook remains positive.

Outlook

The positive outlook reflects Slovenia's rapidly declining government and external debt burdens amid improving economic fundamentals. We could raise the ratings on Slovenia over the next 12-18 months if Slovenia's economy continues to expand without any build-up of macroeconomic imbalances, leading to further income convergence toward the EU average. We could also raise the ratings if government debt continues to decline further or if contingent liabilities deriving from the large state-owned enterprise sector were to decline. We could revise the outlook to stable if imbalances emerged--for example in the labour and housing markets--with adverse...