LONDON – Fitch Ratings agency has downgraded Slovenia's credit grade by one notch, citing a weak economic outlook and a frail banking system.
It cut the government bond rating to BBB+ from A-, which is still investment grade. It left a negative outlook, suggesting there's a risk of another downgrade.
Fitch said the prospects for Slovenia's economy and its public finances have deteriorated in recent months as international investors worry the country might struggle to overhaul its banks. It predicts Slovenia's debt will rise to 72 percent of annual GDP this year, from 22 percent in 2008.
It said the government has shown "a renewed sense of urgency in addressing bank balance sheet clean-up and structural reforms." However, it has concerns over the administration's stability and its ability to sustain the reforms.