Slovak Finance Ministry condemns Moody's downgrade as unfair

Slovakia has faced a credit downgrade by Moody's, which announced the decision late on December 13, 2024. The agency cut the country's credit rating by one notch to A3 and revised its outlook to stable from negative. Moody's cited broad institutional challenges and political tensions within Slovakia as key factors affecting policymaking and governance. The Slovak Finance Ministry responded by denouncing the assessment as improper and based on incorrect political evaluations, arguing that such a viewpoint presents a reputation risk for the ratings agency. In its report, Moody's indicated that the political climate in Slovakia has generated significant challenges regarding effective policymaking. With rising political tensions under Prime Minister Robert Fico's leftist-nationalist government, the agency expressed concerns that this environment would contribute to increased government debt. They expect Slovakia's debt burden to surpass that of similarly-rated countries over the next few years. This projection comes despite the government's commitment to reduce the budget deficit, The Finance Ministry, in its statement, highlighted that several of Moody's claims were inaccurately presented and one-sided, suggesting that the assessment did not adequately reflect the complexities of the political and fiscal environment in Slovakia. The Ministry argued that the portrayal by Moody's was based on unfounded sources and could potentially harm the agency's reputation. In light of Moody's downgrade, Slovakia aims to issue around 12 billion euros in gross bonds next year while undertaking a series of tax hikes and reforms intended to reduce the budget deficit to 4.7% of GDP, down from the 5.8% projected for the current year. Despite the efforts to stabilize the economy, the Finance Ministry expressed concern over the implications of Moody's assessment on investor confidence and Slovakia's financial standing in the international arena.