Moody's affirms Sweden's triple-A rating
Published: 15 Dec 2012 10:02 GMT+01:00
Updated: 15 Dec 2012 10:02 GMT+01:00
- Moody's says Swedish banks are stable (26 Nov 12)
- Three Swedish banks downgraded by Moody's (25 May 12)
- Sweden slashes 2012 growth forecast (16 Apr 12)
"The main driver underlying Moody's decision to affirm the Swedish government's Aaa rating and stable outlook is Moody's expectation of continued healthy public finances relative to Aaa-rated global peers," the company said.
Moody's Investors Service also said that it kept Sweden's gold-plated rating because of expectations that the government "will continue its conservative management of its fiscal position, based on the government's medium-term expenditure ceilings and surplus targets."
Those policies have resulted in a general downward trend in the public debt-to-gross domestic product ratio over the past decade, it said.
"Even among Aaa-rated peers, the country's public finance indicators compare very favourably," the international rating agency said.
Sweden's general government debt fell from 73.3 percent of GDP in 1996 to 38.4 percent of GDP in 2011, compared with a median debt-to-GDP ratio of 46.8 percent for Aaa-rated sovereign debt in the same year.
Even though the weaker economic outlook in 2012-2013 will limit tax receipts and result in an average budget deficit of 0.1 percent of GDP over the two-year period, Moody's said, it still expects the country's debt to further decline to about 35 percent of GDP in the next three years.
Moody's projected Sweden's economic would grow 1.1 percent in 2012 and 1.9 percent in 2013.
"This is a favourable performance compared with the poor short-term economic outlook for many of Sweden's Aaa-rated peers," it said.
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