Standard & Poor's Ratings Services on Friday reaffirmed its credit ratings on the Slovak economy, and maintained the Stable outlook, citing the effective steps taken by the government to cut fiscal deficit.

The long-and short-term foreign and local currency credit rating was affirmed at 'A/A-1'. The agency also maintained the Stable outlook on the economy, saying that the authorities would work towards stabilizing the debt burden through fiscal consolidation. Th outlook also reflects S&P's view that the Slovak banking sector will remain stable, and that external indebtedness will remain low.

The government's continued efforts to consolidate public finances have likely reduced the fiscal deficit to below 3 percent of GDP in 2013, it said.

The agency, meanwhile, cautioned that economic challenges, including high structural and youth unemployment, and low labor activity rates and wealth, pose risks to the ratings.

S&P forecasts that economic growth will pick up by next year, easing the fiscal pressure However, public debt is seen rising by an average of 2.8 percent of GDP annually to reach 55 percent toward the end of 2016.

RTTNews