Standard and Poor's on Thursday affirmed its credit ratings on New Zealand, citing fiscal flexibility and a resilient economy.
The sovereign has its foreign currency long-term rating at AA and local currency long-term rating at AA+. The rating outlook is 'stable.'
"The rating affirmations reflect our view that New Zealand's credit metrics will continue to feature moderate fiscal flexibility, a resilient economy, and strong political and economic institutions conducive to swift and decisive policy reform," S&P credit analyst Kyran Curry said.
These strengths are, however, offset by the country's high external debt and weak external liquidity, vulnerability to swings in commodity income, high household debt, and an adverse demographic profile, Curry added.
S&P said that New Zealand's public finances worsened as a result of the global recession and the unavoidable repair and reconstruction costs associated with the Canterbury earthquakes.
by RTT Staff Writer
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