Standard & Poor’s has increased its long-term credit rating for Iceland from BBB+ to A-. The main reasons are said to be two:
First, Iceland’s balance of payments performance exceeded the Standard & Poor’s forecast. The account surplus is estimated to have been about 5.4 percent last year, supported by a rapid growth in tourism.
Second, the Central Bank of Iceland’s foreign exchange reserves grew by more than 40 percent last year, indicating a stronger external position of the economy.
Standard & Poor’s expects the current account surpluses to persist over the 2017-2020 forecast horizon. Furthermore, the country’s general government debt level as a percentage of GDP is expected to continue to decrease.
Iceland’s short-term credit rating by Standard & Poor’s remains unchanged, at A-2, RÚV reports.