“Standard & Poor’s Ratings Services today affirmed its ‘AA-’ long-term foreign currency and ‘AA+’ long-term local currency sovereign credit ratings on the Republic of Iceland. At the same time, the ‘A-1+’ short-term foreign and local currency ratings on Iceland were affirmed. The outlook is stable.
“The ratings on Iceland are supported by its stable political institutions, a very wealthy and flexible economy, and healthy public finances,” said Standard & Poor’s credit analyst Kai Stukenbrock. “The ratings remain constrained by very high levels both of external financing needs and of external debt throughout the economy.”
Public finances remain healthy. Thanks to strong economic growth, privatization proceeds, and budget surpluses up to and including 2006, gross general government debt will continue to decline rapidly, to about 21% of GDP by 2009, from 50% in 2001.