Fitch affirms New Zealand's sovereign ratings
2012-09-11 15:39:02
Fitch Ratings on Tuesday affirmed New Zealand's sovereign ratings despite high external indebtedness and global economic weakness.
The long-term foreign- and local currency Issuer Default Ratings were affirmed at 'AA' and 'AA+', respectively, with stable outlook.
The ratings reflect Fitch's assessment that high external indebtedness and below median average incomes remain key weaknesses of the sovereign credit profile. Offsetting this is New Zealand's strong track record of monetary policy management, prudent fiscal management, high level of economic development, and a strong governance and business environment, it said.
Despite lingering global economic weakness and domestic fiscal austerity, Fitch expects a boost in economic growth from reconstruction of Christchurch following the 2011 earthquake.
Sustained improvement in New Zealand's external finance ratios and continued household deleveraging would address a number of weaknesses in the sovereign credit profile, it said.