KUALA LUMPUR: Standard & Poor's Ratings Services expects New Zealand's external position to deteriorate further especially when its fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth.
The ratings agency said on Friday, Sept 30 it had lowered its long-term foreign currency ratings on New Zealand to 'AA' from 'AA+' and its long-term local currency rating on New Zealand to 'AA+' from 'AAA'.
S&P had reaffirmed the short-term ratings at 'A-1+'. The outlook on the foreign and local currency ratings was stable. It added the transfer & convertibility (T&C) assessment for New Zealand was unchanged, at 'AAA'.
'The lowering of the foreign and local currency long-term ratings follows our assessment of the likelihood that New Zealand's external position will deteriorate further at a time when the country's fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth,' it said.
S&P said the ratings on New Zealand reflected its opinion of the country's fiscal and monetary policy flexibility, economic resilience, public policy stability, and its sound financial sector.
However, these strengths were moderated by New Zealand's very high external imbalances, which are accompanied by high household and agriculture sector debt, dependence on commodity income, and emerging fiscal pressures associated with its aging population.
The ratings agency said on Friday, Sept 30 it had lowered its long-term foreign currency ratings on New Zealand to 'AA' from 'AA+' and its long-term local currency rating on New Zealand to 'AA+' from 'AAA'.
S&P had reaffirmed the short-term ratings at 'A-1+'. The outlook on the foreign and local currency ratings was stable. It added the transfer & convertibility (T&C) assessment for New Zealand was unchanged, at 'AAA'.
'The lowering of the foreign and local currency long-term ratings follows our assessment of the likelihood that New Zealand's external position will deteriorate further at a time when the country's fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth,' it said.
S&P said the ratings on New Zealand reflected its opinion of the country's fiscal and monetary policy flexibility, economic resilience, public policy stability, and its sound financial sector.
However, these strengths were moderated by New Zealand's very high external imbalances, which are accompanied by high household and agriculture sector debt, dependence on commodity income, and emerging fiscal pressures associated with its aging population.
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