Fitch upgrades Slovenia's credit rating

Fitch upgraded Slovenia's credit rating due to progress in several areas. Public finances have been performing well for some time, and the agency assumes that Slovenia will continue to maintain a balanced primary budget position, supporting a further reduction in government debt, while preserving high liquidity reserves. General government debt declined from 80.2% of GDP in 2020 to 66.6% in 2024, and Fitch projects a further decline to 60% by 2029.

Large liquidity reserves represent an important safety buffer. According to Fitch, prudent debt management is also reflected in increasing investor diversification, an average time to maturity of about nine years and relatively low debt-service costs. In addition, Fitch recognises that the current Government has made notable progress on structural reforms, reducing medium- and long-term fiscal pressures associated with ageing. Overall, the agency notes that Slovenia's economy has demonstrated resilience. Fitch views the slowdown in economic growth as largely temporary and forecasts stable, moderate growth of around 2% over the next two years.

Over the past decade, Fitch has upgraded Slovenia's credit rating only twice: from BBB+ to A- in 2016, and from A- to A in 2019.

Following this upgrade, Slovenia joins a group of European countries with the same rating, namely France, Belgium, Estonia and Malta.

Future changes to Slovenia's credit rating will largely depend on the medium-term trajectory of the government debt-to-GDP ratio, driven primarily by the direction of fiscal policy and the sustainability of economic growth.