S&P downgrades Slovenia

Standard & Poor's said it lowered the long- and short-term sovereign credit ratings on the Republic of Slovenia to AA-/A-1+ from AA/A-1+.

The transfer & convertibility assessment for Slovenia remains unchanged at AAA.

The outlook is stable.

The downgrade reflects a view that Slovenia's fiscal position has deteriorated since the 2008 financial crisis and the government has not thus far presented a credible consolidation strategy, S&P said.

Slovenia's debt burden, which had been declining between 2002 and 2008, has rapidly increased as a consequence of the government's policy of cushioning the economy and banking system from the negative impact of the crisis, the agency said.

The relatively prosperous and economically stable period since Slovenia's independence also has encouraged the government to be complacent about structural reforms, S&P said.

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