Fitch Ratings downgraded Friday Slovenia’s long-term foreign and local currency issuer default ratings to BBB+ from A-, citing the deterioration of the macroeconomic and fiscal outlook, questions over bank recapitalization costs and political uncertainty. The outlook remains negative
Fitch noted that Slovenia’s macroeconomic outlook has “deteriorated significantly” since its last rating review of August 2012.
It expects a 2% GDP contraction for 2012 and a 0.3% decline in 2014, when Slovenia is expected to be one of only two eurozone economies to contract.
Fitch forecasts that the general government deficit (net of bank recapitalisation costs) will rise to 5% of GDP in 2013 from 4% in 2012, against a target set down in the end-2012 budget law of 2.8%.