Fitch Ratings raised Friday the outlook on Slovenia's long-term foreign and local currency issuer default ratings to stable from negative, but warned that the current political crisis could endanger the implementation of structural reforms.
The ratings agency highlighted easing risks in the banking sector and improving access to market funding following the bank bailout in December 2013 as reasons for the improved outlook. It meanwhile affirmed Slovenia's credit rating at BBB+, where it has been since May last year.
The country's access to market funding has eased considerably and its economy is recovering faster than expected, the agency said in a statement. It upgraded its forecast for economic growth for 2014 to 0.5% from a 0.6% contraction previously.
In spite of this, the agency cited insufficient grounds for increasing Slovenia's credit rating, highlighting the "political uncertainty after the Prime Minister, Alenka Bratusek, lost a leadership contest in her party in late April".
While saying that the country has passed a number of reforms in recent years, it expresses that the renewed political instability "poses a risk to the structural reform agenda in 2014-15, including the privatisation of key state-owned enterprises".
Source: The Slovenia times
