Slovakia had its rating downgraded by Moody’s on Tuesday, moving the country from A1 to A2 with negative outlook.
Moody’s justified the move by the recent eurozone problems, rising debt in the country, the fall of the government in October and Slovakia’s strong pro-export economy. The report states: “The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region” are stated as the main reasons for downgrading Slovakia’s bond rating and changing its outlook to negative”.
“Increased susceptibility to financial and political event risk present considerable challenges to achieving the government’s fiscal consolidation targets and reversing the recent adverse trend in debt dynamics. Slovakia’s general government debt-to-GDP ratio has climbed from 28% in 2008 to over 44% in 2011, and will not stabilise in 2012-13 as had been initially expected,” the Moody’s report explained.