"Slovenia's debt burden, which had been declining between 2002 and 2008, has rapidly increased as a consequence of the government's policy of cushioning the economy and banking system from the negative impact of the crisis," the ratings agency said.
Standard & Poors expects general government debt to grow to 43% of GDP in 2011, double the 2008 level.
The agency believes the relatively prosperous and economically stable period since Slovenia's independence has encouraged the government to be complacent about structural reforms, which has put further pressure on government finances.
Its opinion is that the upcoming general election in December presents an opportunity for the new government to prevent further slippage and implement structural reforms.
The outlook remains stable based on expectations of a fiscal consolidation and implementation of a budget consolidation programme. Although a delay in structural reforms is expected, the agency also expects the new government to implement them.
SOURCE: The Slovenia Times
