Rating agency Standard and Poor’s maintains Iceland’s BBB-/A-3 long- and short term credit rating, according to a press release issued yesterday.Archive photo by Páll Stefánsson.
The agency described Iceland as having “the institutional capacity to address financial sector problems and build an environment more conducive to job creation and sustainable economic growth.”
According to the agency’s 2012-2015 forecast, Iceland’s economy will continue to expand by between 2 and 3 percent per year. The stable outlook is partly the result of the country’s improved economic fundamentals and declining risks association with capital controls being lifted over the next few years, Standard and Poor’s said.
The agency believes the anticipated global slowdown will not hurt exports significantly as goods’ export volumes are constrained by supply rather than demand. It praises the government’s efforts to narrow the deficit, which dropped to 5.4 percent of GDP from 10 percent in the previous two years.