As we head into the second half of 2024, the balance of outlooks on European developed market sovereign ratings is positive (+4), as three smaller former EU program economies--Cyprus, Greece, and Portugal--plus Andorra continue to run tight fiscal settings and pay down public debt while growing faster than peers. For the remaining 26 in S&P Global Ratings' European developed markets portfolio, rating outlooks are stable in the aftermath of a series of downgrades earlier this year (Estonia, France, Latvia, and Lithuania). Europe has shown considerable resilience in the face of a series of economic shocks (the pandemic then the energy price hike in 2022), but the cost of this has been a deterioration in public finances. This led us to lower our sovereign rating on France to 'AA-' on May 31, 2024.

New or yet-to-be-formed governments face decisions about public finances.  Recent elections--in Belgium, France, and the U.K.--are likely to have implications for whether and how sovereigns can put debt to GDP on a downward path. Moreover, while it is welcome news that European economies are gradually recovering this year after the region narrowly avoided a technical recession in 2023, the long-term growth outlook for the world's highest concentration of wealthy states is one of sustained weakness, reflecting ageing demographics, structural factors, and a variety of mostly self-imposed constraints on the European Union's ability to function as a single economic bloc. As in the past, low growth is likely to impinge on fiscal outcomes--and sovereign ratings--over the medium term.

Developed Economies Are Recovering But Growth Is Slow and Productivity Has Underperformed The U.S.

Despite a population 37% larger than the U.S., nominal combined GDP for the 27 members of the EU is 26% smaller in absolute (market exchange rate) terms, and per capita GDP is 46% smaller (also at market exchange rates). The income gap between the U.S. and EU is, moreover, increasing. Since the turn of the century (end-2023 versus end-1999; OECD data) the productivity gap between the euro area and the U.S. in GDP per hour worked (at constant prices) has widened from 7% in 1999 to 23% last year (and from 3% to 31% in the case of Italy). European productivity underperformance is not an exclusively euro area phenomenon. The widening productivity gap of the U.K. (another small economy, equivalent to 2.3% of global GDP) is almost identical to the euro area's: from 8% in 1999 to 23% last year. Even the more IT and services-intensive economy of Sweden saw its hourly productivity gap decline over the same period, albeit only slightly.

Impediments constrain the ability of the EU and the euro area to compete with larger economic blocs.  But more than anything else this is the result of the EU's failure to leverage off the single market's potential for economies of scale. The largest EU economy, Germany, represents just 4.4% of global GDP based on market exchange rates (and less than that on a purchasing power parity basis). But growth strategies are largely left to national governments to decide; most national governments, particularly in the euro area, prioritize policies to protect national companies and employees--effectively inhibiting the proper functioning of the single market by erecting barriers to professional services, commerce, and labor mobility. As a result, there are almost no genuinely pan-European banks and very few pan-European firms that can compete with their American and Asian equivalents. That is a drag on growth, increasingly visible in the widening EU versus U.S. productivity gap.

Asset Limits: A Missed Opportunity For The Euro To Raise Its Reserve Currency Profile

The absence of a single jointly backed pan-European risk-free asset that can compete with U.S. Treasuries (as well as a system of equity financing that could rival that in the U.S.) also puts euro area capital markets at a competitive disadvantage versus those of the U.S. That disadvantage is writ large in the euro's much smaller share of global allocated reserves of just under 20% of the total, versus three times that for the U.S. dollar. In a world of rising geopolitical risks, trade protectionism, and transactional and less predictable alliances, this limits Europe's fiscal flexibility to finance a contra-cyclical fiscal response to any future emergency--such as a higher price tag for rising defense expenditure. The fragmentation of European sovereign debt markets also increases the chances of market dislocations.

The solutions to these problems would involve a series of major institutional changes to deepen European integration.  These include some big changes, which have been proposed on several occasions in the past: a transition to a proper fiscal union with permanent and significant fiscal transfers rather than transitory ones; and a single euro area joint bond, supported by a single tax base. Based on the results of the June 2024 EU elections, most European electorates do not favor such reforms. Most electorates appear to want fiscal and labor and economic policy to remain under national control, with a tendency toward protection rather than competition. But if this means an increasing wealth gap with other major global economic blocks, member states may eventually reconsider these policy preferences--a reconsideration potentially triggered by the next global economic shock. But for the present, at around €34,000, French per capita GDP, for example, is now 40% below that in the U.S. At current productivity trends, that gap appears set to grow even larger.

Table 1

European Developed Markets Sovereign Rating Strengths And Weaknesses
Issuer	Sovereign foreign currency ratings	Institutional assessment	Economic assessment	External assessment	Fiscal assessment, budget performance	Fiscal assessment, debt	Monetary assessment
Andorra	A-/Positive/A-2	3	3*	2§	1	3	5
Austria	AA+/Stable/A-1+	2	1	1	3	3	2
Belgium	AA/Stable/A-1+	3	1	2	4	4	2
Cyprus	BBB+/Positive/A-2	3	2	5	1	2§	4
Czech Republic	AA-/Stable/A-1+	2	3	1	3	2	2
Denmark	AAA/Stable/A-1+	1	1	3	1	1	3
Estonia	A+/Stable/A-1	2	3	2	3*	1	3
Finland	AA+/Stable/A-1+	2	1	4	1	2	2
France	AA-/Stable/A-1+	2	1	4	4	5	2
Germany	AAA/Stable/A-1+	2	1	1	2	2	2
Greece	BBB-/Positive/A-3	3	3	5	1	6	2
Guernsey	A+/Stable/A-1	2	2	4	2*	2	5
Iceland	A+/Stable/A-1	2	2	3	2	4	4
Ireland	AA/Stable/A-1+	2	1	3	2	2	2
Italy	BBB/Stable/A-2	3	2	4	5	6	2
Jersey	AA-/Stable/A-1+	2	2	4	1	2	5
Latvia	A/Stable/A-1	3	3	2	3	2	3
Liechtenstein	AAA/Stable/A-1+	1	1	3	1	2	3
Lithuania	A/Stable/A-1	3	3	2	2	2	3
Luxembourg	AAA/Stable/A-1+	2	1	3	1	2	2
Malta	A-/Stable/A-2	3	3	2	3	2	3
Netherlands	AAA/Stable/A-1+	2	1	2	2	2	2
Norway	AAA/Stable/A-1+	1	1	1	1	1	1
Portugal	A-/Positive/A-2	3	3	4	1	4§	2
Slovakia	A+/Stable/A-1	3	3	2	4	2	2
Slovenia	AA-/Stable/A-1+	3	3	1	3	2	2
Spain	A/Stable/A-1	3	2	4	3	5	2
Sweden	AAA/Stable/A-1+	1	1	2	1	1	1
Switzerland	AAA/Stable/A-1+	1	1	1	1	1	2
United Kingdom	AA/Stable/A-1+	2	1	2	4	5	1
1 (%)		16.67	46.67	20	40	16.67	10
2 (%)		43.33	20	33.33	20	50	53.33
3 (%)		40	33.33	16.67	23.33	6.67	20
4 (%)		0	0	23.33	13.33	10	6.67
5 (%)		0	0	6.67	3.33	10	10
6 (%)		0	0	0	0	6.67	0
Median		2	2	2	2	2	2
Mean		2.23	1.83	2.66	2.18	2.64	2.53
Standard Deviation		0.73	0.89	1.26	1.25	1.52	1.11
*Deterioration since Dec 2023. §Improvement since Dec 2023

Table 2

European Developed Markets Economic Outlooks
	Real GDP growth (%)		GG balance / GDP (%)		Net GG debt / GDP (%)		Current account balance / GDP (%)		Narrow net ext. debt / CAR (%)
	2024a	2025a	2024a	2025a	2024a	2025a	2024a	2025a	2024a	2025a
Andorra	1.10	1.50	1.10	1.20	-28.04	-29.17	17.14	17.40	-142.69	-150.57
Austria	0.40	1.80	-3.00	-2.80	70.21	71.96	2.34	2.19	95.09	94.27
Belgium	1.40	1.40	-4.00	-3.60	98.59	98.95	0.30	0.32	84.68	85.06
Cyprus	3.00	3.00	2.70	2.40	61.72	56.53	-10.68	-9.92	40.24	44.56
Czech Republic	1.25	2.50	-2.50	-2.25	32.61	33.04	0.22	0.70	-8.90	-8.84
Denmark	2.20	2.00	1.70	0.70	6.89	6.32	10.04	9.86	31.41	31.27
Estonia	-0.30	2.90	-3.20	-3.50	10.11	13.12	-2.11	-1.93	22.78	22.30
Finland	-0.25	1.60	-2.94	-2.43	37.44	38.82	-0.25	-0.22	194.60	191.77
France	0.90	1.40	-5.20	-4.60	102.03	103.35	-0.14	-0.27	235.58	235.10
Germany	0.30	1.20	-1.67	-1.20	57.77	56.66	7.76	7.74	57.92	55.13
Greece	2.40	2.50	-1.10	-0.90	135.20	129.06	-5.69	-5.24	255.12	241.03
Guernsey	1.00	0.00	-3.10	-3.24	-46.75	-43.36	N/A	N/A	N/A	N/A
Iceland	2.25	2.50	-1.60	-1.30	45.64	43.66	-0.86	-0.78	60.66	59.18
Ireland	2.30	2.20	1.55	1.40	33.77	31.00	8.56	8.11	128.63	124.20
Italy	0.90	1.20	-4.80	-4.10	132.78	134.66	1.70	1.64	176.03	172.42
Jersey	2.10	0.60	-1.75	-1.50	-96.68	-97.76	N/A	N/A	N/A	N/A
Latvia	1.50	2.75	-3.50	-3.00	38.06	39.31	-4.28	-3.60	32.39	33.15
Liechtenstein	1.20	1.40	1.85	2.00	-105.87	-108.37	N/A	N/A	N/A	N/A
Lithuania	2.00	2.60	-2.50	-2.00	32.47	33.58	1.38	0.64	3.33	5.26
Luxembourg	1.40	1.70	-0.60	-0.50	-9.97	-10.11	5.32	5.46	166.28	178.09
Malta	4.00	3.70	-4.50	-4.00	39.97	40.28	1.05	1.10	94.46	90.71
Netherlands	0.50	1.50	-0.50	-0.80	41.46	40.89	8.11	7.79	141.45	140.55
Norway	1.00	1.70	13.10	11.00	-304.90	-285.76	12.35	10.30	-460.89	-505.40
Portugal	1.40	1.80	0.00	0.10	89.71	85.96	1.29	1.44	114.51	106.71
Slovakia	2.50	2.90	-5.50	-4.90	50.40	52.50	-1.99	-2.21	50.18	50.51
Slovenia	2.25	2.50	-2.90	-2.75	53.32	54.00	2.83	2.33	32.45	32.34
Spain	2.20	1.90	-3.20	-3.10	92.69	91.76	2.85	2.49	167.53	164.98
Sweden	1.00	1.90	-1.00	-0.60	24.33	24.05	5.68	5.52	106.20	104.77
Switzerland	1.20	1.50	0.50	0.50	14.86	14.01	4.97	4.99	-2.52	-2.49
United Kingdom	0.60	1.20	-4.50	-3.80	99.07	99.31	-3.01	-2.93	234.53	238.39
a--Actual.

Andorra (A-/Positive /A-2)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: Andorra Upgraded To 'A-/A-2' On Improved External Data And Financial Sector's Liquidity Management; Outlook Positive, May 10, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 3
• Monetary assessment: 5

Outlook: Positive

The positive outlook reflects our view that further enhancements to external data, deepening liquidity options for the financial sector, and the long-term economic benefits of the EU association agreement could support an upgrade within the next two years.

Upside scenario

We could raise the ratings if Andorra were to substantially enhance liquidity management for the financial sector, while continuing to improve its external data reporting. Alternatively, we could raise the ratings if economic growth per capita rose well above our current forecast, aligning with peers.

Downside scenario

We could revise the outlook to stable if data reporting does not improve further or if economic growth per capita remains at its current level. The ratings could also come under pressure if the financial sector experienced heightened risks; if Andorra reversed its reforms related to liquidity management and alignment with international standards in the banking sector; or if a shift in budgetary policy led to an increase in government debt.

Table 3

Andorra
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	42.25	40.69	37.06	41.80	41.43	43.80	45.24	47.28	51.35	53.34
GDP growth	1.59	2.02	-11.18	8.29	9.56	1.44	1.10	1.50	1.30	1.30
GDP per capita growth	-0.25	0.22	-11.72	6.22	6.81	-2.74	0.10	0.50	0.30	0.30
Current account balance/GDP	N/A	18.01	15.53	14.06	17.25	16.96	17.14	17.40	17.18	17.34
Gross external financing needs/CAR&FXR	N/A	N/A	281.10	256.94	231.00	197.76	194.77	189.99	182.34	178.16
Narrow net external debt/CAR	N/A	-110.16	-121.16	-126.54	-125.31	-132.61	-142.69	-150.57	-152.60	-160.06
GG balance/GDP	2.68	2.31	-1.07	-1.17	4.84	1.50	1.10	1.20	1.30	1.30
GG net debt/GDP	-18.05	-22.70	-26.62	-28.86	-26.04	-27.31	-28.04	-29.17	-30.67	-32.22
CPI inflation	1.01	0.50	0.10	1.73	6.19	5.63	3.60	2.50	2.00	2.00
Bank credit to resident private sector/GDP	150.85	140.36	156.26	141.84	124.19	115.88	111.58	108.21	105.69	103.23
N/A--Not applicable. e--Estimate.

Austria (AA+/Stable /A-1+)

• Analyst: michelle.keferstein@spglobal.com
• Latest publication: (Full Analysis) Austria, Feb. 26, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 3
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our view that Austria will remain resilient to the adverse economic consequences of the war in Ukraine and monetary policy tightening, thanks to its solid economy. We also expect the country will continue efforts to reduce its dependence on Russia for energy supplies.

Downside scenario

We could lower the rating if the economic growth outlook materially weakens, for example due to adverse economic effects from the war, such as a material disruption of energy supply, or if budgetary and current account outcomes are significantly worse than our current projections.

Upside scenario

We could raise our ratings on Austria if the current risks to energy supplies significantly decline, while the economy remains robust and budgetary consolidation is kept on track, with further declines in budget deficit and government debt as a share of GDP on a clearly discernible downward trajectory.

(Latest research update published on Aug. 25, 2023)

Table 4

Austria
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	51.58	50.19	48.88	53.65	52.45	56.79	58.60	61.43	67.13	70.23
GDP growth	2.43	1.45	-6.63	4.24	4.81	-0.79	0.40	1.80	1.40	1.40
GDP per capita growth	1.85	1.03	-7.08	3.87	4.27	-2.16	-0.32	1.39	1.00	1.00
Current account balance/GDP	0.90	2.38	3.44	1.65	-0.29	2.66	2.34	2.19	2.28	2.16
Gross external financing needs/CAR&FXR	180.80	178.16	185.09	178.74	179.09	173.95	183.48	181.08	176.31	175.97
Narrow net external debt/CAR	104.25	103.20	131.84	104.64	88.85	92.94	95.09	94.27	92.12	92.56
GG balance/GDP	0.17	0.57	-7.99	-5.77	-3.27	-2.65	-3.00	-2.80	-2.50	-2.20
GG net debt/GDP	63.81	60.90	70.60	71.58	69.76	68.10	70.21	71.96	73.17	73.93
CPI inflation	2.12	1.49	1.39	2.76	8.62	7.71	3.40	2.80	2.50	2.00
Bank credit to resident private sector/GDP	106.58	108.38	117.16	114.84	113.29	103.91	101.41	99.94	98.88	97.73
e--Estimate.

Belgium (AA/Stable/A-1+)

• Analyst: remy.carasse@spglobal.com
• Latest publication: (Full Analysis) Belgium, April 29, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 2

Outlook: Stable

The stable outlook indicates that we consider that the risks to Belgium's public finances are mitigated by its resilient economy and strong labor market, as well as its strong institutions.

Downside scenario

We could lower the ratings during the next 24 months if Belgium is unable to narrow its budget deficit, creating a significant deviation from our projections. This could occur if it does not address its structural budgetary imbalances.

We could also lower the ratings if nominal GDP growth proves to be significantly lower than we project. This could follow a deterioration in the geopolitical situation or meaningful worsening of Belgium's competitiveness over the next couple of years. Either or both scenarios would cause net general government debt as a share of GDP to increase sharply.

Upside scenario

We could raise the ratings if Belgium's budget deficit declined faster than we expect--for example, because the government is resolute in implementing budgetary consolidation and this leads to a clearly discernible declining trend in net government debt.

(Latest research update published on March 17, 2023)

Table 5

Belgium
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	47.53	46.63	45.66	51.87	49.89	53.74	55.81	58.45	63.83	66.58
GDP growth	1.79	2.24	-5.30	6.93	3.01	1.37	1.40	1.40	1.40	1.30
GDP per capita growth	1.30	1.70	-5.54	6.35	2.01	0.80	0.90	0.90	0.90	0.80
Current account balance/GDP	-0.91	0.10	1.41	1.31	-1.01	-0.97	0.30	0.32	0.31	0.38
Gross external financing needs/CAR&FXR	204.10	195.27	207.56	192.87	188.15	191.71	199.79	199.03	194.78	193.88
Narrow net external debt/CAR	75.17	88.39	110.31	81.28	71.20	81.84	84.68	85.06	82.37	82.56
GG balance/GDP	-0.87	-1.99	-8.97	-5.40	-3.57	-4.44	-4.00	-3.60	-3.40	-3.40
GG net debt/GDP	93.10	91.13	104.71	100.43	97.79	98.75	98.59	98.95	99.39	99.94
CPI inflation	2.32	1.25	0.43	3.22	10.34	2.28	3.90	2.30	2.00	1.90
Bank credit to resident private sector/GDP	93.01	93.63	97.41	93.03	90.36	87.63	86.84	86.98	87.43	88.00
e--Estimate.

Cyprus (BBB+/Positive/A-2)

• Analyst: samuel.tilleray@spglobal.com
• Latest publication: Cyprus Upgraded To 'BBB+' On Reduced Debt Stock; Outlook Positive, June 14, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 2
• External assessment: 5
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 4

Outlook: Positive

The positive outlook reflects upward pressure on the sovereign ratings, as fiscal and economic outcomes outperform peers. In our view, the strengthening financial position of Cyprus' banking system should lead to greater convergence of domestic financing conditions to that of the broader euro area, with potential positive ratings implications.

Upside scenario

We could raise the sovereign rating on Cyprus within the next 12-24 months if we observed further improvements in the resilience of the Cypriot financial system, which is still burdened with the highest nonperforming loan (NPL) ratio in the EU. A similar action could also occur if the very elevated current account deficit and overall gross external financing needs of residents were to narrow, easing our concerns about external leverage.

Downside scenario

We could revise the outlook to stable if, within the next 12-24 months, fiscal progress and commitment to debt reduction were to unwind. Downward rating pressure could also materialize if structural reform progress were to stall, creating meaningful delays to Cyprus' NextGenEU funding.

Table 6

Cyprus
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	29.62	29.62	28.41	32.90	32.33	35.01	36.21	38.10	41.96	44.15
GDP growth	5.65	5.54	-3.44	9.91	5.06	2.47	3.00	3.00	3.00	2.90
GDP per capita growth	4.50	4.13	-4.76	8.93	4.05	0.69	1.58	1.68	1.78	1.78
Current account balance/GDP	-3.06	-6.05	-9.35	-7.44	-9.15	-11.52	-10.68	-9.92	-9.01	-8.41
Gross external financing needs/CAR&FXR	317.80	277.24	250.43	225.00	230.60	194.47	197.01	190.76	185.47	183.67
Narrow net external debt/CAR	145.88	124.90	148.00	100.44	50.19	33.46	40.24	44.56	46.46	50.11
GG balance/GDP	-3.62	0.94	-5.67	-1.83	2.73	3.08	2.70	2.40	1.80	1.40
GG net debt/GDP	95.01	88.52	98.21	87.93	76.13	67.69	61.72	56.53	52.23	48.63
CPI inflation	1.43	0.25	-0.64	2.45	8.39	3.53	2.30	2.00	2.00	2.00
Bank credit to resident private sector/GDP	135.75	107.42	107.61	89.81	75.37	65.69	62.91	60.42	58.08	55.94
e--Estimate.

Czech Republic (AA-/Stable/A-1+)

• Analyst: gabriel.forss@spglobal.com
• Latest publication: (Full Analysis) Czech Republic, April 15, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 3
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our view that the buffers provided by Czechia's solid government and external balance sheets, including still sizable foreign currency reserves, will mitigate the adverse macroeconomic impact stemming from the recent period of high inflation and monetary tightening.

Downside scenario

We could lower the ratings if adverse economic conditions significant increase Czechia's budget deficit and government debt, above our current expectations. We could also take this action if the country's energy supply became constrained, for example from accentuated supply pressure, preventing the country from sustaining industrial production and leading to a much weaker medium-term growth outlook.

Upside scenario

We could raise the ratings if Czech income levels improve to those of similarly rated sovereigns globally, for example, due to implementation of economic and budgetary structural reforms enhancing the value-added nature of output.

(Latest research update published on Oct. 13, 2023)

Table 7

Czech Republic
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	23.47	23.71	23.00	26.85	27.63	30.56	31.29	33.29	35.64	37.39
GDP growth	3.22	3.03	-5.50	3.55	2.35	-0.31	1.25	2.50	2.25	2.25
GDP per capita growth	2.92	2.65	-5.89	5.52	2.14	-3.17	0.75	2.35	2.25	2.25
Current account balance/GDP	0.51	0.36	2.02	-2.73	-4.73	0.39	0.22	0.70	0.99	1.15
Gross external financing needs/CAR&FXR	89.93	91.32	86.05	87.60	97.86	99.84	89.00	92.47	92.15	91.72
Narrow net external debt/CAR	-7.35	-13.23	-21.70	-5.84	0.67	-11.69	-8.90	-8.84	-9.18	-8.93
GG balance/GDP	0.89	0.29	-5.77	-5.11	-3.17	-3.65	-2.50	-2.25	-2.25	-2.00
GG net debt/GDP	21.68	19.79	24.95	27.84	30.74	30.24	32.61	33.04	33.76	34.26
CPI inflation	1.94	2.57	3.34	3.32	14.77	11.96	2.50	2.25	2.00	2.25
Bank credit to resident private sector/GDP	55.22	54.14	56.90	57.91	55.10	54.21	54.71	54.68	55.18	55.88
e--Estimate.

Denmark (AAA/Stable/A-1+)

• Analyst: michelle.keferstein@spglobal.com
• Latest publication: Denmark 'AAA/A-1+' Ratings Affirmed; Outlook Stable, Feb. 9, 2024

Rating score snapshot:

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 3
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our view that Denmark's solid economic growth and its wealthy, adaptable, and open economy, with large fiscal buffers and high institutional effectiveness, will stay in place over 2024-2027.

Downside scenario

We could lower the ratings if Denmark's budgetary outcomes were markedly weaker than our forecasts, coupled with a significant increase in the government debt-to-GDP ratio.

Table 8

Denmark
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	61.72	59.68	60.93	69.47	68.13	68.13	70.70	74.26	80.83	84.15
GDP growth	1.99	1.49	-2.42	6.84	2.73	1.89	2.20	2.00	1.60	1.60
GDP per capita growth	1.42	1.06	-2.70	6.53	2.15	0.87	1.41	1.49	1.20	1.20
Current account balance/GDP	6.28	7.42	7.24	8.74	11.71	9.91	10.04	9.86	9.54	9.31
Gross external financing needs/CAR&FXR	208.56	198.60	215.55	210.85	177.73	174.72	172.46	171.12	168.56	168.89
Narrow net external debt/CAR	55.33	52.41	63.72	46.05	40.56	32.11	31.41	31.27	30.25	30.96
GG balance/GDP	0.76	4.13	0.38	4.06	3.34	3.13	1.70	0.70	0.40	0.40
GG net debt/GDP	15.85	12.81	12.55	11.09	9.12	9.12	6.89	6.32	6.83	6.45
CPI inflation	0.69	0.69	0.39	1.94	8.48	3.34	2.30	2.10	2.00	1.90
Bank credit to resident private sector/GDP	163.35	163.17	166.21	154.32	132.69	140.03	135.82	134.33	134.30	134.27
e--Estimate.

Estonia (A+/Stable /A-1)

• Analyst: ludwig.heinz@spglobal.com
• Latest publication: Estonia Ratings Lowered To 'A+/A-1' From 'AA-/A-1+' On Economic, Fiscal, And Security Risks; Outlook Stable, May 31, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our expectation that the war in Ukraine will not spread to the territory of NATO members, including Estonia's, which has been a member since 2004.

The stable outlook also takes into account the medium-term risks to Estonia's budgetary growth, and balance of payments performance as a result of regional geopolitical developments and foreign investors' perception of these factors. These risks are, however, balanced by a projected cyclical economic recovery on the back of stronger domestic and foreign demand and looser monetary policy, as well as by our assessment that the country's prior generally prudent fiscal policy will be preserved, with the authorities taking sufficient policy measures to ultimately keep budget deficits in check.

Downside scenario

We could lower the ratings if the fallout from the Russia-Ukraine war proved more significant than we currently expect, or if the war escalated, weighing more heavily on Estonia's public finances and economic growth, and presenting additional security risks.

Upside scenario

We could raise the ratings if the risks from the conflict subside, underpinning an improvement in Estonia's growth prospects, foreign investment flows, and budgetary position.

Table 9

Estonia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	23.12	23.55	23.56	27.68	27.76	29.64	30.55	32.53	36.21	38.49
GDP growth	3.78	4.03	-0.97	7.25	-0.46	-3.01	-0.30	2.90	2.80	2.60
GDP per capita growth	3.34	3.72	-1.05	7.11	-2.95	-3.63	-0.35	2.80	2.70	2.50
Current account balance/GDP	0.88	2.45	-1.90	-2.59	-3.23	-1.36	-2.11	-1.93	-2.33	-2.06
Gross external financing needs/CAR&FXR	149.38	139.42	144.29	137.59	134.05	136.26	138.83	137.13	134.91	134.49
Narrow net external debt/CAR	19.28	16.95	13.51	6.11	17.30	23.65	22.78	22.30	21.98	23.40
GG balance/GDP	-0.55	0.12	-5.43	-2.46	-0.97	-3.39	-3.20	-3.50	-2.90	-2.70
GG net debt/GDP	-1.41	-1.91	4.42	5.94	5.37	7.27	10.11	13.12	15.39	17.37
CPI inflation	3.42	2.27	-0.63	4.48	19.45	9.11	3.30	2.50	2.10	2.10
Bank credit to resident private sector/GDP	62.44	59.97	64.04	60.63	58.56	59.48	60.17	60.08	60.04	60.13
e--Estimate.

Finland (AA+/Stable/A-1+)

• Analyst: niklas.steinert@spglobal.com
• Latest publication: (Full Analysis) Finland, April 29, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our expectation that Finland's economy will recover from the current economic downturn, and fiscal and external deficits will moderate, supported by real wage growth, higher consumption, and stronger external demand from Finland's main trading partners.

Downside scenario

We could consider a negative rating action in the next two years if Finland's economic outlook significantly deteriorates compared with our current expectations, leading to a pronounced and protracted deterioration in the country's fiscal position.

Upside scenario

We could raise the long-term ratings if consolidation efforts strengthened Finland's fiscal performance and if its external balance sheet improved significantly.

(Latest research update published on Oct. 27, 2023)

Table 10

Finland
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	50.01	48.66	49.21	53.57	50.80	53.42	53.62	55.83	60.88	63.50
GDP growth	1.14	1.22	-2.35	2.84	1.34	-1.16	-0.25	1.60	1.33	1.33
GDP per capita growth	0.96	1.14	-2.49	2.68	1.07	-1.44	-0.35	1.45	1.18	1.18
Current account balance/GDP	-1.85	-0.30	0.53	0.41	-2.44	-1.46	-0.25	-0.22	-0.27	-0.28
Gross external financing needs/CAR&FXR	288.96	350.82	373.41	348.14	291.42	327.43	317.91	317.46	309.62	307.46
Narrow net external debt/CAR	223.07	206.70	257.85	196.29	191.63	186.75	194.60	191.77	181.17	175.88
GG balance/GDP	-0.85	-0.95	-5.57	-2.80	-0.36	-2.70	-2.94	-2.43	-2.02	-1.96
GG net debt/GDP	27.63	24.84	31.18	27.04	34.18	34.86	37.44	38.82	39.73	40.56
CPI inflation	1.18	1.13	0.39	2.06	7.18	4.33	0.90	1.33	1.60	1.60
Bank credit to resident private sector/GDP	95.04	96.65	101.54	100.40	97.67	94.77	96.36	96.77	96.81	96.86
e--Estimate.

France (AA-/Stable/A-1+)

• Analyst: remy.carasse@spglobal.com
• Latest publication: France Long-Term Rating Lowered To 'AA-' From 'AA' On Deterioration Of Budgetary Position; Outlook Stable, May 31, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 5
• Monetary assessment: 2

Outlook: Stable

The stable outlook on France reflects our expectations that real economic growth will accelerate and support the government's budgetary consolidation, albeit not enough to bring down its already elevated general government debt-to-GDP ratio.

Downside scenario

We could lower our sovereign ratings on France if economic growth turns out to be materially below our projections over a protracted period. The ratings could also come under pressure if France proves unable to reduce its large budget deficit, for example due to further budgetary slippages, and if general government interest payments as a share of revenue increase beyond our current expectations.

Upside scenario

We could raise our ratings if France's budget deficit narrows much faster than we project, while economic growth remains robust, leading to a clearly discernible downward trajectory for the general government debt-to-GDP ratio.

Table 11

France
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	41.53	40.51	39.23	43.75	41.12	44.83	46.10	48.19	52.71	55.04
GDP growth	1.60	2.08	-7.58	6.81	2.62	1.12	0.90	1.40	1.40	1.30
GDP per capita growth	1.27	1.68	-7.83	6.41	2.27	0.80	0.70	1.20	1.20	1.10
Current account balance/GDP	-0.83	0.51	-1.62	0.36	-2.03	-0.74	-0.14	-0.27	-0.36	-0.43
Gross external financing needs/CAR&FXR	314.97	330.42	389.67	373.10	350.20	327.45	344.32	337.93	325.69	320.21
Narrow net external debt/CAR	234.19	251.64	360.50	277.54	228.50	236.74	235.58	235.10	226.16	220.28
GG balance/GDP	-2.32	-2.39	-8.94	-6.59	-4.74	-5.45	-5.20	-4.60	-4.00	-3.50
GG net debt/GDP	90.31	89.87	101.23	99.21	99.63	100.34	102.03	103.35	104.02	104.37
CPI inflation	2.10	1.30	0.52	2.07	5.91	5.66	2.60	2.00	1.80	1.80
Bank credit to resident private sector/GDP	102.60	104.53	118.76	114.77	114.79	109.05	107.87	107.53	107.19	107.06
e--Estimate.

Germany (AAA/Stable/A-1+)

• Analyst: niklas.steinert@spglobal.com
• Latest publication: Germany 'AAA/A-1+' Ratings Affirmed; Outlook Stable, March 22, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our opinion that Germany's external and fiscal buffers, diversified economy, and proven institutional effectiveness will continue to provide sufficient rating buffers over the next two years.

Downside scenario

We could lower our ratings if Germany's economic slump persisted longer than we anticipate. We believe such a scenario could coincide with the country's fiscal position worsening beyond our projections, with low prospects for improvement and debt or contingent liabilities increasing significantly.

Table 12

Germany
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	48.01	46.85	46.75	51.45	49.04	52.84	53.96	56.42	61.69	64.45
GDP growth	0.98	1.08	-3.83	3.16	1.81	-0.19	0.30	1.20	1.20	1.10
GDP per capita growth	0.65	0.80	-4.00	3.18	1.71	-1.52	0.10	1.00	1.00	0.90
Current account balance/GDP	7.95	8.17	6.54	7.28	4.25	6.25	7.76	7.74	7.61	7.53
Gross external financing needs/CAR&FXR	201.03	198.64	208.89	211.33	218.48	208.48	201.67	198.98	191.06	186.90
Narrow net external debt/CAR	57.09	61.49	85.51	80.30	60.23	56.56	57.92	55.13	50.05	47.08
GG balance/GDP	1.95	1.53	-4.34	-3.59	-2.50	-2.46	-1.67	-1.20	-0.95	-0.93
GG net debt/GDP	56.45	54.63	60.70	60.97	60.78	60.11	57.77	56.66	55.80	55.01
CPI inflation	1.86	1.44	0.28	3.21	8.70	6.07	2.70	2.30	1.90	1.90
Bank credit to resident private sector/GDP	87.98	89.40	95.03	94.18	93.88	90.50	91.47	92.48	93.56	94.76
e--Estimate.

Greece (BBB-/Positive/A-3)

• Analyst: samuel.tilleray@spglobal.com
• Latest publication: Greece Outlook Revised To Positive On Ongoing Debt Stock Reduction; Affirmed At 'BBB-/A-3', April 19, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 5
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 6
• Monetary assessment: 2

Outlook: Positive

The positive outlook reflects our expectation that the tight fiscal regime will continue to spur a reduction in the government debt ratio, while growth should continue to outperform that of Greece's eurozone peers.

Upside scenario

We could raise the ratings within the next 24 months if Greece's net government debt-to-GDP ratio falls further to approach peer sovereign levels. We believe the authorities could achieve this via a combination of ongoing structural economic reforms that boost Greek economic competitiveness, full deployment of the large NextGenerationEU funds available to Greece, and sustained solid primary budget surpluses over a protracted period.

Downside scenario

We could revise our outlook to stable within the next 24 months if Greece's budgetary performance and external imbalances, such as from the elevated current account deficit, worsened materially beyond our expectations. This could happen, for example, if geopolitical and external pressures hit Greece harder than we currently assume.

Table 13

Greece
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	19.74	19.14	17.58	20.10	20.80	22.87	23.94	25.43	28.14	29.74
GDP growth	1.67	1.88	-9.32	8.38	5.56	2.01	2.40	2.50	2.40	2.30
GDP per capita growth	1.92	2.04	-9.27	8.79	7.77	2.46	2.40	2.50	2.40	2.30
Current account balance/GDP	-2.91	-1.49	-6.65	-6.76	-10.27	-6.34	-5.69	-5.24	-5.01	-5.25
Gross external financing needs/CAR&FXR	266.48	244.15	341.51	345.99	344.00	321.35	317.05	308.07	287.77	275.25
Narrow net external debt/CAR	370.46	359.71	533.37	362.97	262.32	267.27	255.12	241.03	217.07	205.46
GG balance/GDP	0.91	0.83	-9.77	-6.98	-2.49	-1.59	-1.10	-0.90	-0.80	-0.70
GG net debt/GDP	165.89	160.98	189.17	177.44	155.58	145.43	135.20	129.06	123.62	118.57
CPI inflation	0.78	0.51	-1.26	0.57	9.30	4.16	2.60	2.10	2.00	2.00
Bank credit to resident private sector/GDP	94.55	83.80	85.56	59.58	55.12	52.97	52.33	52.46	52.79	53.22
e--Estimate.

States of Guernsey (A+/Stable/A-1)

• Analyst: samuel.tilleray@spglobal.com
• Latest publication: Guernsey 'A+/A-1' Ratings Affirmed; Outlook Stable, Jan. 12, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 2
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects broadly balanced risks to Guernsey's balance sheet and overall creditworthiness over the next two years, underpinned by our expectation that authorities will continue to prioritize sustainable long-term public finances.

Downside scenario

We could take a negative rating action if, contrary to our expectations, a material fiscal shock were to significantly erode Guernsey's general government liquid assets. This could happen, for instance, if the government reintroduced capex plans without adequate offsetting revenue measures. We could also take a negative rating action if a significant shift in the global regulatory, tax, and competitive environment undermined the jurisdiction's financial services sector.

Upside scenario

We could raise the ratings if Guernsey's economy significantly outperformed our expectations. Substantial improvements in the quality and timeliness of national income accounts data could also lead us to take a positive rating action.

Table 14

Guernsey
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	59.98	58.61	55.37	65.17	64.60	70.34	74.89	75.19	75.66	76.14
GDP growth	-0.13	0.74	-7.01	7.41	3.67	1.50	1.00	0.00	0.00	0.00
GDP per capita growth	-0.80	0.08	-7.39	6.69	3.15	1.20	0.70	-0.30	-0.30	-0.30
Current account balance/GDP	0.00	0.00	0.00	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Gross external financing needs/CAR&FXR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Narrow net external debt/CAR	N.M.	N.M.	N.M.	N/A	N/A	N/A	N/A	N/A	N/A	N/A
GG balance/GDP	-0.79	-0.61	-6.35	-3.62	-2.00	-2.13	-3.10	-3.24	-2.62	-2.27
GG net debt/GDP	-63.09	-68.25	-72.26	-70.88	-48.90	-49.97	-46.75	-43.36	-40.50	-37.88
CPI inflation	2.47	2.08	1.58	2.82	7.20	7.22	2.80	2.00	2.20	2.20
Bank credit to resident private sector/GDP	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
N.M.--Not meaningful. N/A--Not applicable. e--Estimate.

Iceland (A+/Stable/A-1)

• Analyst: ravi.bhatia@spglobal.com
• Latest publication: Iceland 'A+/A-1' Ratings Affirmed; Outlook Stable, May 10, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 2
• External assessment: 3
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 4

Outlook: Stable

The stable outlook reflects our view that Iceland's economy will continue to expand over the next two years, while recording only modest fiscal and external deficits. It also reflects our assumption that volcanic activity will remain contained and not have a significant adverse effect on the country's economic, fiscal, and balance-of-payments performance.

Downside scenario

We could lower the ratings if Iceland's fiscal or balance-of-payments performance worsened significantly compared to our forecasts. This could happen, for example, if persistently disruptive volcanic activity hampered the country's tourism sector, with repercussions affecting growth and fiscal prospects.

Upside scenario

We could raise the ratings if Iceland's public finances strengthened significantly more than we currently anticipate, either from narrower deficits and lower net public debt, or a decrease in the government's contingent liabilities. We could also raise the ratings if we took the view that increasing economic diversification made the economy more resilient to external shocks.

Table 15

Iceland
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	75.15	69.71	60.37	70.70	76.49	80.84	85.73	90.57	94.55	96.88
GDP growth	4.89	1.86	-6.94	5.15	8.88	4.06	2.25	2.50	2.33	2.33
GDP per capita growth	2.70	0.55	-8.05	3.24	5.89	1.76	0.25	0.99	0.82	0.82
Current account balance/GDP	4.26	6.55	1.05	-2.68	-1.68	0.95	-0.86	-0.78	-0.78	-0.81
Gross external financing needs/CAR&FXR	83.37	80.11	80.23	90.08	91.54	95.66	101.39	96.48	99.11	97.02
Narrow net external debt/CAR	41.73	39.40	66.96	60.55	49.60	49.75	60.66	59.18	56.88	54.75
GG balance/GDP	1.05	-1.43	-8.25	-7.65	-3.14	-1.40	-1.60	-1.30	-0.90	-0.70
GG net debt/GDP	30.81	37.03	45.10	47.63	47.99	47.89	45.64	43.66	42.63	41.48
CPI inflation	2.68	3.02	2.84	4.44	8.31	8.73	4.75	3.50	2.50	2.50
Bank credit to resident private sector/GDP	131.30	128.51	139.01	115.14	108.33	104.75	103.33	102.27	102.38	102.49
e--Estimate.

Ireland (AA/Stable/A-1+)

• Analyst: samuel.tilleray@spglobal.com
• Latest publication: (Full Analysis) Ireland, May 20, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 3
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook balances our expectation that Ireland's resilient economic growth and fiscal performance will cause general government debt as a proportion of GNI* to decline further, against the risks posed by the country's concentrated revenue sources.

Downside scenario

We could lower the ratings on Ireland over the next two years if its fiscal performance deteriorates significantly. A weaker budgetary position could result, for example, from a long-term decline in the country's competitiveness against a backdrop of continued concentration in revenue sources.

Upside scenario

Although we see an upgrade in the next couple of years as less likely, we could raise the ratings on Ireland if stronger economic growth and fiscal outcomes enable it to reduce government debt much faster than we project, and the revenue base becomes more diversified.

(Latest research update published on May 19, 2023)

Table 16

Ireland
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	80.06	81.35	86.34	102.55	105.36	103.51	106.34	111.25	121.44	127.05
GDP growth	8.47	5.30	6.62	15.12	9.43	-3.20	2.30	2.20	2.00	2.20
GDP per capita growth	7.44	3.71	5.32	14.16	8.27	-7.08	1.29	1.19	0.99	1.19
Current account balance/GDP	4.89	-19.86	-6.53	13.71	10.78	9.87	8.56	8.11	7.67	7.86
Gross external financing needs/CAR&FXR	319.53	328.06	324.00	292.91	286.91	261.16	270.79	263.63	253.35	246.51
Narrow net external debt/CAR	195.83	191.23	191.34	169.43	134.14	122.53	128.63	124.20	117.66	113.78
GG balance/GDP	0.13	0.48	-4.98	-1.51	1.71	1.65	1.55	1.40	0.80	0.90
GG net debt/GDP	52.17	46.75	49.63	44.37	37.00	37.06	33.77	31.00	29.02	26.97
CPI inflation	0.70	0.89	-0.49	2.37	8.11	5.18	2.20	2.10	1.90	1.80
Bank credit to resident private sector/GDP	54.72	48.80	44.48	37.24	32.29	32.55	31.53	30.61	29.80	28.95
e--Estimate.

Italy (BBB/Stable/A-2)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: (Full Analysis) Italy, April 22, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 2
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 5
• Fiscal assessment – Debt burden: 6
• Monetary assessment: 2

Outlook: Stable

The stable outlook balances our current projection of increasing government debt in GDP terms, from already-high levels, against the stronger economic growth that should be generated as a result of the significant economic stimulus provided by EU funds.

Downside scenario

We could lower the ratings should government borrowing needs deviate significantly from their current trajectory. Economic growth and public finances could come under pressure if Italy's structural economic and budgetary reforms are implemented only partially, especially those linked to the disbursement of EU funds.

Upside scenario

We could raise the ratings if budgetary performance improves--for example, due to implementing deficit-reducing policies or if economic growth is stronger than expected--and this leads to a decline in government debt as a share of GDP.

(Latest research update published on Oct. 20, 2023)

Table 17

Italy
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	34.59	33.63	31.81	36.38	35.01	38.22	39.39	41.30	45.22	47.13
GDP growth	0.93	0.48	-8.97	8.31	3.99	0.92	0.90	1.20	1.10	1.00
GDP per capita growth	1.10	1.60	-8.71	9.05	4.35	0.98	1.20	1.50	1.40	1.30
Current account balance/GDP	2.61	3.26	3.88	2.37	-1.58	0.51	1.70	1.64	1.70	1.61
Gross external financing needs/CAR&FXR	224.03	227.88	223.23	222.04	220.43	213.85	200.28	197.47	191.73	189.34
Narrow net external debt/CAR	218.21	224.28	286.83	224.52	182.07	179.33	176.03	172.42	162.83	159.28
GG balance/GDP	-2.17	-1.50	-9.38	-8.74	-8.56	-7.39	-4.80	-4.10	-3.70	-3.30
GG net debt/GDP	126.55	126.44	144.82	138.19	133.13	130.38	132.78	134.66	136.34	138.23
CPI inflation	1.18	0.68	-0.19	1.94	8.76	5.87	1.40	1.90	1.70	1.70
Bank credit to resident private sector/GDP	93.63	91.79	99.84	90.78	84.66	76.68	73.84	71.96	70.62	69.65
e--Estimate.

States of Jersey (AA-/Stable/A-1+)

• Analyst: samuel.tilleray@spglobal.com
• Latest publication: (Full Analysis) Jersey, Jan. 15, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 2
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects broadly balanced risks to Jersey's balance sheet and overall creditworthiness over our two-year outlook horizon, underpinned by our expectation that authorities will continue to prioritize sustainable long-term public finances.

Downside scenario

Rating pressure could build if Jersey's policymakers failed to adequately mitigate economic fallout from potential external risks, particularly to the large financial services sector. These risks could pertain, for example, to changes in the global regulatory, tax, and competitive environment; or shifts in the U.K.'s financial sector following its departure from the EU single market. Rating pressure could also materialize if we projected that the island's fiscal asset buffer were to fall consistently below 100% of GDP.

Upside scenario

We could raise the ratings if we saw a substantial improvement in the availability of external statistical data, such as full information on the balance of payments and international investment position, potentially revealing lower external financing risks to Jersey's economy and public finances than we currently assume.

(Latest research update published on Jan. 13, 2023)

Table 18

Jersey
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	59.78	60.27	55.19	67.40	68.80	80.30	87.19	89.02	90.74	92.41
GDP growth	1.91	2.08	-10.04	10.57	5.93	9.30	2.10	0.60	0.80	0.80
GDP per capita growth	1.32	2.08	-10.21	10.89	5.93	9.19	2.00	0.50	0.70	0.70
Current account balance/GDP	0.00	0.00	0.00	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Gross external financing needs/CAR&FXR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Narrow net external debt/CAR	N.M.	N.M.	N.M.	N/A	N/A	N/A	N/A	N/A	N/A	N/A
GG balance/GDP	-0.18	-0.80	-5.51	-1.93	-2.82	-2.23	-1.75	-1.50	-1.62	-2.79
GG net debt/GDP	-116.66	-122.03	-140.18	-129.20	-104.46	-97.64	-96.68	-97.76	-98.98	-99.20
CPI inflation	3.96	2.89	1.26	2.75	9.27	10.24	3.50	1.70	1.70	2.00
Bank credit to resident private sector/GDP	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
e--Estimate.

Latvia (A/Stable /A-1)

• Analyst: gabriel.forss@spglobal.com
• Latest publication: Latvia Long-Term Ratings Lowered To 'A' On Economic, Fiscal, And Security Risks; Outlook Stable, May 31, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our expectation that the Russia-Ukraine war will not spread to the territory of NATO members, including Latvia, which has been a member since 2004.

The stable outlook takes into account medium-term risks to Latvia's budgetary, growth, and balance-of-payments performance as a result of regional geopolitical developments and the perception of foreign investors. These risks are, however, balanced by a projected cyclical economic recovery on the back of stronger domestic and foreign demand and looser monetary policy. Moreover, we believe Latvia's authorities will preserve the country's prudent fiscal policy, taking enough policy measures to ultimately keep budget deficits in check.

Downside scenario

We could lower the ratings if consequences from the Russia-Ukraine war proved to be more significant than we currently expect, or if the war escalated, weighing more heavily on Latvia's public finances and economic growth, while increasing security risks.

Upside scenario

We could raise the ratings if risks from the war subside, underpinning an improvement in Latvia's growth prospects, foreign investment flows, and budgetary position.

Table 19

Latvia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	17.93	17.94	18.17	21.03	21.47	23.12	23.90	25.44	28.42	30.18
GDP growth	3.99	0.59	-3.51	6.73	2.95	-0.28	1.50	2.75	2.75	2.50
GDP per capita growth	4.77	1.24	-2.78	7.73	2.56	-0.48	1.40	2.96	2.96	2.71
Current account balance/GDP	-0.18	-0.62	2.91	-3.93	-4.77	-4.01	-4.28	-3.60	-3.77	-3.47
Gross external financing needs/CAR&FXR	182.73	168.12	154.46	160.70	149.75	159.76	155.65	155.17	154.77	153.95
Narrow net external debt/CAR	48.30	45.84	43.27	33.59	27.72	31.09	32.39	33.15	32.95	33.38
GG balance/GDP	-0.74	-0.49	-4.38	-7.18	-4.63	-2.21	-3.50	-3.00	-2.50	-2.50
GG net debt/GDP	29.61	29.13	34.56	35.32	33.99	35.95	38.06	39.31	39.90	40.70
CPI inflation	2.55	2.75	0.08	3.24	17.24	9.06	1.75	2.25	2.75	2.50
Bank credit to resident private sector/GDP	30.72	29.04	28.82	24.21	22.13	21.25	20.63	19.98	19.29	18.75
e--Estimate.

Liechtenstein (AAA/Stable/A-1+)

• Analyst: michelle.keferstein@spglobal.com
• Latest publication: (Full Analysis) Liechtenstein, May 27, 2024

Rating score snapshot:

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 3
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our view that Liechtenstein's strong budgetary position and extensive financial buffers, along with its high policy effectiveness and prudent regulatory framework, will protect the principality's creditworthiness from global economic and financial uncertainty.

Downside scenario

We could lower the ratings if the principality's public finances weakened materially and international tax or financial regulatory pressure on Liechtenstein, among other financial centers, increased. This could severely constrain government revenue and hinder political strategy and effectiveness over a prolonged period.

(Latest research update published on Nov. 24, 2023)

Table 20

Liechtenstein
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	174.39	166.13	164.00	196.15	184.91	197.20	206.14	200.48	202.51	205.67
GDP growth	1.88	-2.16	-5.32	15.72	-3.00	0.20	1.20	1.40	1.46	1.46
GDP per capita growth	1.18	-3.09	-6.06	14.97	-3.90	-0.67	0.50	0.70	0.75	0.75
Current account balance/GDP	0.00	0.00	0.00	0.00	0.00	N/A	N/A	N/A	N/A	N/A
Gross external financing needs/CAR&FXR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Narrow net external debt/CAR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
GG balance/GDP	3.05	3.82	7.41	2.51	3.32	2.60	1.85	2.00	2.10	2.10
GG net debt/GDP	-89.83	-102.03	-119.70	-106.45	-97.64	-103.55	-105.87	-108.37	-111.13	-114.00
CPI inflation	0.94	0.36	-0.73	0.58	2.84	2.14	1.50	1.40	1.20	1.10
Bank credit to resident private sector/GDP	208.41	215.38	233.81	203.08	203.47	195.35	193.93	192.69	191.73	190.77
e--Estimate. N/A--Not applicable.

Lithuania (A/Stable/A-1)

• Analyst: ludwig.heinz@spglobal.com
• Latest publication: Lithuania Ratings Lowered To 'A' From 'A+' On Economic, Fiscal, Security Risks; Outlook Stable, May 31, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our expectation that the war in Ukraine will not spread to the territory of NATO members, including Lithuania's, which has been a member since 2004.

Moreover, the stable outlook takes into account the medium-term risks to Lithuania's budgetary, growth, and balance of payments performance as a result of regional geopolitical developments and foreign investors' perception of these factors. These risks are, however, balanced by a projected cyclical economic recovery on the back of stronger domestic and foreign demand and looser monetary policy, as well as by our assessment that the country's past prudent fiscal policy will be preserved as the authorities implement sufficient policy measures to ultimately keep budget deficits in check.

Downside scenario

We could lower the ratings if the fallout from the Russia-Ukraine war proved to be more significant than we currently expect, or if the war escalated, weighing more heavily on Lithuania's public finances, economic growth, and presenting additional security risks.

Upside scenario

We could raise the ratings if the risks from the conflict subside, underpinning an improvement in Lithuania's growth prospects, foreign investment flows, and its budgetary position.

Table 21

Lithuania
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	19.14	19.62	20.39	23.89	25.31	27.24	28.24	30.12	33.55	35.64
GDP growth	3.99	4.67	-0.02	6.28	2.44	-0.34	2.00	2.60	2.50	2.30
GDP per capita growth	5.44	5.22	-0.02	6.22	2.06	-2.12	1.69	2.65	2.55	2.35
Current account balance/GDP	0.29	3.54	7.28	1.14	-5.47	1.94	1.38	0.64	0.02	-0.16
Gross external financing needs/CAR&FXR	135.24	126.90	111.56	123.62	131.03	126.46	128.31	128.06	125.76	124.22
Narrow net external debt/CAR	32.08	26.92	17.07	9.44	6.99	2.43	3.33	5.26	5.62	5.52
GG balance/GDP	0.54	0.49	-6.49	-1.15	-0.59	-0.80	-2.50	-2.00	-1.90	-1.50
GG net debt/GDP	30.09	29.03	37.17	33.90	31.94	30.40	32.47	33.58	34.19	34.47
CPI inflation	2.54	2.24	1.06	4.63	18.85	8.69	1.60	2.40	2.40	2.30
Bank credit to resident private sector/GDP	44.64	42.85	40.81	41.19	39.82	38.31	38.10	38.04	38.06	38.19
e--Estimate.

Luxembourg (AAA/Stable/A-1+)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: (Full Analysis) Luxembourg, Jan. 29, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 3
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects Luxembourg's ample fiscal space, allowing it to weather the persisting stresses, including a fragile expected recovery, and spending pressures, without denting its net government asset position. The outlook also mirrors our view that the country has the policy flexibility and financial soundness to overcome potential changes to its tax system, upon which its role as a financial center partially relies.

Downside scenario

We could consider a negative rating action if the effects of the changing corporate taxation framework were more pronounced than we anticipate and weakened the country's economic growth prospects and budgetary performance. The rating could also come under pressure if Luxembourg's risks to economic and financial stability materialized, for example due to resurgent credit growth, potentially sparking an unsustainable acceleration in asset valuations.

(Latest research update published on Sept. 11, 2020)

Table 22

Luxembourg
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	117.94	113.85	117.71	134.83	126.49	129.78	131.63	135.69	145.80	149.86
GDP growth	1.22	2.92	-0.91	7.17	1.38	-1.10	1.40	1.70	1.80	1.70
GDP per capita growth	-0.69	0.92	-2.84	5.71	-0.30	-3.40	-0.59	-0.29	-0.20	-0.29
Current account balance/GDP	6.49	8.87	8.60	7.90	7.65	6.78	5.32	5.46	6.55	7.83
Gross external financing needs/CAR&FXR	414.65	411.34	440.16	423.24	472.87	394.19	391.41	402.22	400.96	401.64
Narrow net external debt/CAR	243.39	255.64	211.99	189.29	188.94	156.12	166.28	178.09	187.84	199.34
GG balance/GDP	2.98	2.22	-3.42	0.54	-0.35	-1.25	-0.60	-0.50	-0.20	0.00
GG net debt/GDP	-16.02	-18.27	-14.95	-14.49	-10.70	-9.96	-9.97	-10.11	-10.59	-11.25
CPI inflation	2.02	1.65	0.00	3.47	8.16	2.93	2.20	2.00	1.80	1.80
Bank credit to resident private sector/GDP	102.40	105.67	107.32	100.79	98.21	93.20	92.27	92.51	93.11	93.72
e--Estimate.

Malta (A-/Stable/A-2)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: (Full Analysis) Malta, June 10, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects the balance between our expectation that energy budgetary support will slow the reduction of Malta's budget deficits, and the country's resilient economic and budgetary prospects in the medium term, supported by the recovery plan (partly financed by EU funds) and the tourism sector.

Downside scenario

We could lower the ratings if economic growth is much lower than we expect, with an associated deterioration of the government's budget and current account balances that are significantly worse than our projections. A reversal of the government's efforts to further enhance and implement governance and anti-money-laundering frameworks could also trigger a negative rating action.

Upside scenario

We could raise the ratings if Malta's budget and external positions significantly improve, or if the economy diversifies substantially over the medium term to reduce vulnerability to external shocks.

(Latest research update published on Sept. 9, 2022)

Table 23

Malta
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	31.21	31.11	29.55	34.80	33.88	37.61	39.20	41.65	45.85	48.43
GDP growth	7.42	7.15	-8.17	12.54	8.07	5.74	4.00	3.70	3.80	4.00
GDP per capita growth	3.53	2.77	-8.44	11.49	3.87	2.66	1.96	1.67	1.76	1.96
Current account balance/GDP	6.33	8.94	-0.71	5.95	-3.93	0.94	1.05	1.10	1.76	1.73
Gross external financing needs/CAR&FXR	201.55	168.80	146.55	162.92	201.27	184.49	190.32	187.44	182.96	182.10
Narrow net external debt/CAR	60.87	51.66	41.44	138.76	123.06	102.25	94.46	90.71	85.87	84.42
GG balance/GDP	1.95	0.76	-9.39	-7.61	-5.54	-4.90	-4.50	-4.00	-3.70	-3.30
GG net debt/GDP	33.98	29.39	42.19	42.73	41.63	39.09	39.97	40.28	40.65	40.48
CPI inflation	1.73	1.53	0.79	0.71	6.13	5.56	2.90	2.40	2.10	2.00
Bank credit to resident private sector/GDP	71.47	69.96	79.88	73.66	70.40	68.60	68.65	68.71	73.69	73.98
e--Estimate.

Netherlands (AAA/Stable/A-1+)

• Analyst: sebastein.boreux@spglobal.com
• Latest publication: (Full Analysis) The Netherlands, April 22, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our view that the Netherlands will maintain strong credit metrics over the next two years. The Netherlands' wealthy and diversified economy and proven institutional effectiveness provide strong rating buffers.

Downside scenario

The ratings could come under pressure in case of a significant and protracted deterioration of the country's long-term productive capacity that resulted in a significant negative revision to our budgetary and external forecasts.

(Latest research update published on Oct. 20, 2023)

Table 24

Netherlands
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	53.20	52.67	52.26	58.92	57.38	62.78	63.99	66.88	72.94	76.17
GDP growth	2.36	1.96	-3.89	6.19	4.33	0.12	0.50	1.50	1.40	1.50
GDP per capita growth	1.77	1.36	-4.58	5.78	3.65	-1.12	0.10	1.10	1.00	1.10
Current account balance/GDP	9.15	6.98	5.72	10.26	6.86	10.17	8.11	7.79	7.59	7.66
Gross external financing needs/CAR&FXR	242.32	242.99	262.07	242.69	221.86	236.02	232.56	227.48	220.44	217.12
Narrow net external debt/CAR	167.43	180.73	223.12	164.56	137.84	137.55	141.45	140.55	135.49	134.38
GG balance/GDP	1.50	1.80	-3.71	-2.24	-0.09	-0.34	-0.50	-0.80	-0.80	-0.80
GG net debt/GDP	46.79	43.28	48.25	46.28	44.39	42.18	41.46	40.89	40.45	39.94
CPI inflation	1.60	2.68	1.12	2.82	11.64	4.10	2.80	2.50	1.90	2.00
Bank credit to resident private sector/GDP	105.20	100.34	102.50	95.82	92.37	86.05	84.03	81.98	80.21	78.40
e--Estimate.

Norway (AAA/Stable/A-1+)

• Analyst: amr.abdullah@spglobal.com
• Latest publication: (Full Analysis) Norway, March 11, 2024

Rating score snapshot:

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 1

Outlook: Stable

The stable outlook reflects our assessment that Norway possesses substantial financial reserves and headroom to endure a temporary economic setback without a major impact on its credit metrics. Robust fiscal and external net asset positions, along with considerable wealth, a strong institutional framework, and an effective monetary policy regime also support the credit rating.

Downside scenario

Our 'AAA' rating on Norway could come under pressure if the country's robust external and fiscal balance sheets rapidly erode, combined with significantly weaker institutions and governance standards; or geopolitical risk markedly rises, leading to an external security risk for the country.

(Latest research update published on March 12, 2021)

Table 25

Norway
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	83.05	76.71	68.49	93.37	109.44	88.42	85.37	88.49	95.08	100.11
GDP growth	0.83	1.12	-1.28	3.91	3.01	0.48	1.00	1.70	1.60	1.60
GDP per capita growth	0.12	0.51	-2.00	3.45	2.36	-0.69	0.33	1.26	1.15	1.15
Current account balance/GDP	8.95	3.79	1.10	14.89	30.17	17.74	12.35	10.30	9.94	9.07
Gross external financing needs/CAR&FXR	171.09	186.19	206.92	154.36	117.72	150.54	170.16	161.26	157.41	156.53
Narrow net external debt/CAR	-279.64	-402.82	-586.92	-385.31	-230.73	-382.27	-460.89	-505.40	-515.84	-539.59
GG balance/GDP	7.81	6.52	-2.56	10.29	25.56	16.32	13.10	11.00	9.00	8.50
GG net debt/GDP	-195.26	-243.34	-277.85	-252.87	-190.15	-270.42	-304.90	-285.76	-282.22	-281.08
CPI inflation	2.75	2.21	1.26	3.48	5.77	5.54	3.40	2.40	2.20	2.10
Bank credit to resident private sector/GDP	145.80	152.11	165.31	138.75	110.99	127.77	135.90	137.45	139.46	142.00
e--Estimate.

Portugal (A-/Positive/A-2)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: Portugal Upgraded To 'A-' On Ongoing Steep External And Government Deleveraging; Outlook Positive, March 1, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 2

Outlook: Positive

The positive outlook on Portugal reflects our view that the country's external and government debt positions could improve further.

Upside scenario

We could raise the ratings within the next 24 months if Portugal's external position continues to progress thanks to current account surpluses and the further improvement in the economy's external balance sheet, or if the general government debt continues to decline amid persistently strong budgetary performance.

Downside scenario

We could revise the outlook to stable should the current declining trajectories of external and government debt reverse, for example through a deterioration in budgetary or current account performance.

Table 26

Portugal
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	23.55	23.35	22.25	24.81	24.65	27.43	28.51	30.13	33.25	35.06
GDP growth	2.85	2.68	-8.30	5.74	6.83	2.26	1.40	1.80	1.80	1.80
GDP per capita growth	3.03	2.83	-8.47	5.71	6.27	1.14	1.20	1.80	1.80	1.80
Current account balance/GDP	0.55	0.44	-1.04	-0.76	-1.15	1.37	1.29	1.44	1.50	1.52
Gross external financing needs/CAR&FXR	229.22	236.43	254.12	234.54	208.01	190.99	189.59	187.12	181.74	179.49
Narrow net external debt/CAR	212.27	211.59	267.15	183.14	134.75	118.50	114.51	106.71	96.46	90.65
GG balance/GDP	-0.35	0.12	-5.82	-2.88	-0.32	1.20	0.00	0.10	0.10	0.10
GG net debt/GDP	113.40	109.86	123.00	117.37	106.68	94.80	89.71	85.96	82.52	79.29
CPI inflation	1.17	0.30	-0.13	0.94	8.11	5.26	3.50	2.10	2.00	2.00
Bank credit to resident private sector/GDP	118.07	109.62	119.86	112.74	100.73	91.29	86.28	83.18	80.35	77.69
e--Estimate.

Slovakia (A+/Stable/A-1)

• Analyst: ludwig.heinz@spglobal.com
• Latest publication: Slovakia 'A+/A-1' Ratings Affirmed; Outlook Stable, April 26, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our expectation that Slovakia's fiscal deficits will start to narrow from next year, and that it will preserve a generally prudent fiscal policy. The outlook also reflects our view that the economy will remain resilient in the near term, despite challenges to the medium-term growth outlook.

Downside scenario

We could lower our ratings in the next 12-24 months if, contrary to our current expectations, the government's fiscal position does not improve from next year due to insufficient consolidation efforts, putting government debt firmly on an upward path. We could also consider taking a negative rating action if we observed increasing challenges to the country's political or judicial institutions, including through the erosion of checks and balances, potentially reducing or delaying EU fund disbursements.

Upside scenario

We could raise the ratings if fiscal balances improve significantly more strongly than we expect and the economy proves adaptable to emerging structural challenges, including through effective policymaking.

Table 27

Slovakia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	19.50	19.40	19.56	21.72	21.27	24.46	26.07	27.93	31.02	32.86
GDP growth	4.03	2.51	-3.33	4.77	1.87	1.60	2.50	2.90	1.90	1.80
GDP per capita growth	3.88	2.37	-3.46	4.73	2.34	1.71	2.35	2.75	1.75	1.65
Current account balance/GDP	-2.20	-3.35	0.56	-3.96	-7.33	-1.58	-1.99	-2.21	-1.77	-1.17
Gross external financing needs/CAR&FXR	149.82	157.89	154.87	156.57	172.85	147.12	144.76	143.17	139.25	135.92
Narrow net external debt/CAR	41.69	43.99	56.41	47.40	45.19	46.68	50.18	50.51	46.95	45.00
GG balance/GDP	-1.01	-1.21	-5.35	-5.18	-1.67	-4.89	-5.50	-4.90	-4.30	-3.70
GG net debt/GDP	42.66	42.54	48.75	49.40	47.24	48.19	50.40	52.50	54.37	55.71
CPI inflation	2.54	2.77	2.01	2.82	12.12	11.09	2.90	3.70	3.20	2.70
Bank credit to resident private sector/GDP	62.35	63.23	67.10	67.05	67.87	62.48	60.84	61.19	61.27	61.54
e--Estimate.

Slovenia (AA-/Stable/A-1+)

• Analyst: niklas.steinert@spglobal.com
• Latest publication: (Full Analysis) Slovenia, June 10, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 2
• Monetary assessment: 2

Outlook: Stable

The stable outlook on Slovenia reflects our expectation of the country's economic resilience and gradual budgetary consolidation, despite inflation affecting the country's large manufacturing sector. Budgetary and external buffers remain solid, while private debt is low.

Downside scenario

We could lower our ratings on Slovenia if the country's budgetary position deviates significantly and negatively from our budgetary forecast, or economic growth is considerably weaker than we project. The adverse effect of a large and adverse demographic shift due to an aging population also represents a significant risk to economic growth and public finances if left unchecked.

Upside scenario

We could raise our ratings on Slovenia if economic growth proves more resilient than projected, boosting GDP per capita without undermining the economy's strong external position, while budget deficits recede.

(Latest research update published on June 9, 2023)

Table 28

Slovenia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	26.21	26.14	25.64	29.32	28.50	32.22	33.11	34.67	37.81	39.54
GDP growth	4.45	3.52	-4.24	8.23	2.46	1.59	2.25	2.50	2.25	2.50
GDP per capita growth	4.40	2.82	-4.92	7.56	2.55	1.12	1.54	1.79	1.54	1.79
Current account balance/GDP	5.87	5.85	7.22	3.31	-1.01	4.48	2.83	2.33	2.41	2.48
Gross external financing needs/CAR&FXR	127.57	125.33	133.28	139.21	138.38	131.41	137.80	137.95	134.31	131.91
Narrow net external debt/CAR	46.04	47.77	58.28	40.65	30.46	29.76	32.45	32.34	30.63	28.88
GG balance/GDP	0.74	0.72	-7.65	-4.58	-2.98	-2.46	-2.90	-2.75	-2.50	-2.25
GG net debt/GDP	52.25	48.48	55.66	55.17	54.74	52.45	53.32	54.00	54.66	54.92
CPI inflation	1.93	1.69	-0.28	2.05	9.32	7.22	3.25	2.75	2.50	2.25
Bank credit to resident private sector/GDP	47.96	47.15	48.29	45.41	46.35	40.74	40.72	40.71	41.28	41.77
e--Estimate.

Spain (A/Stable /A-1)

• Analyst: adrienne.benassy@spglobal.com
• Latest publication: Spain 'A/A-1' Ratings Affirmed; Outlook Stable, March 15, 2024

Rating score snapshot:

• Institutional assessment: 3
• Economic assessment: 2
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 5
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects balanced risks to Spain's creditworthiness, given a very gradual reduction of government debt, and political fragmentation, which could hinder policy implementation, counterbalanced by resilient economic growth and continuing external deleveraging.

Downside scenario

We could lower the ratings if, contrary to our current expectations, the economy's external position and the government's budgetary position deteriorate. This could come from significant and negative budgetary slippages. It could also stem from an unexpected deterioration of Spain's current account, slowing external deleveraging or increasing external liquidity risks.

Upside scenario

We could raise the ratings if the sovereign's external position strengthens, government debt to GDP declines at a faster pace than we currently expect, while Spain's commercial banking system remains solid and largely domestically funded (in net terms).

Table 29

Spain
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	30.47	29.71	27.00	30.50	29.89	32.87	34.41	36.36	40.04	42.14
GDP growth	2.28	1.98	-11.17	6.40	5.77	2.50	2.20	1.90	2.00	2.00
GDP per capita growth	2.00	1.38	-11.91	6.25	5.69	1.11	1.89	1.60	1.69	1.69
Current account balance/GDP	1.88	2.11	0.62	0.76	0.61	2.58	2.85	2.49	2.43	2.51
Gross external financing needs/CAR&FXR	217.70	213.23	238.87	226.25	205.74	193.94	200.77	197.85	190.91	187.33
Narrow net external debt/CAR	224.06	229.09	322.17	232.00	173.30	178.41	167.53	164.98	155.24	151.83
GG balance/GDP	-2.59	-3.06	-10.12	-6.73	-4.73	-3.64	-3.20	-3.10	-3.00	-3.00
GG net debt/GDP	88.93	87.51	107.23	102.23	97.24	94.48	92.69	91.76	91.11	90.57
CPI inflation	1.74	0.77	-0.34	3.01	8.32	3.40	3.00	2.00	2.00	1.80
Bank credit to resident private sector/GDP	97.63	92.99	106.92	97.65	88.10	78.48	74.33	71.81	70.33	68.95
e--Estimate.

Sweden (AAA/Stable/A-1+)

• Analyst: freja.dobreff@spglobal.com
• Latest publication: (Full Analysis) Sweden Oct 30, 2023

Rating score snapshot:

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 1

Outlook: Stable

The stable outlook reflects our view that Sweden has ample policy headroom to weather a period of lower growth. In particular, Sweden's fiscal position is strong with a low net general government debt burden. Sweden also benefits from a strong external balance sheet and effective institutions, which we expect to remain the case over the next two years, supporting the 'AAA' rating.

Downside scenario

We could lower the ratings if economic growth is materially weaker than expected for a sustained period, leading to wider fiscal deficits that erode Sweden's currently strong fiscal position. We could also take a negative rating action if the government's policy responses were impaired by fragmented politics with negative implications for growth.

(Original RU Published on Oct 28, 2022)

Table 30

Sweden
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	54.48	52.02	52.79	61.39	55.48	55.59	59.57	62.38	66.23	68.51
GDP growth	1.90	2.55	-2.01	5.94	1.46	-0.17	1.00	1.90	1.80	1.80
GDP per capita growth	0.64	1.45	-2.93	5.41	0.75	-0.83	0.70	1.65	1.55	1.55
Current account balance/GDP	2.23	5.32	5.80	6.91	4.95	6.45	5.68	5.52	5.52	5.47
Gross external financing needs/CAR&FXR	232.88	204.99	213.11	205.04	193.53	210.94	205.30	196.86	192.34	182.52
Narrow net external debt/CAR	130.08	130.83	163.82	115.69	102.69	103.84	106.20	104.77	100.64	99.17
GG balance/GDP	0.76	0.54	-2.83	0.00	1.20	-0.65	-1.00	-0.60	0.40	0.75
GG net debt/GDP	25.69	23.70	27.68	26.26	24.98	23.39	24.33	24.05	22.83	21.32
CPI inflation	2.04	1.72	0.65	2.66	8.06	5.91	2.25	1.75	1.90	1.90
Bank credit to resident private sector/GDP	134.16	134.63	140.67	137.02	136.81	129.68	125.37	123.52	121.93	120.48
e--Estimate.

Switzerland (AAA/Stable/A-1+)

• Analyst: ludwig.heinz@spglobal.com
• Latest publication: (Full Analysis) Switzerland, Feb. 12, 2024

Rating score snapshot:

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 1
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 2

Outlook: Stable

The stable outlook reflects our view that Switzerland's strong fiscal and external buffers, resilient and diversified economy, monetary policy flexibility, and track record of effective policymaking will enable the country to weather potential external and domestic shocks.

Downside scenario

We could lower the ratings on Switzerland if we observed that, contrary to our expectations, the predictability and effectiveness of its policymaking had deteriorated. We could also take this action if adverse external shocks were to materially deteriorate Switzerland's export base, significantly weakening the country's external financial position. A materialization of contingent liabilities emanating from the country's large financial sector could also be negative for the ratings, if coupled with other adverse developments affecting the sovereign. We currently view such scenarios as unlikely, however.

(Latest research update published on Aug. 11, 2023)

Table 31

Switzerland
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	84.92	83.83	85.57	93.08	92.84	98.75	103.95	102.18	102.57	103.64
GDP growth	2.86	1.14	-2.14	5.39	2.57	0.69	1.20	1.50	1.40	1.50
GDP per capita growth	2.13	0.42	-2.87	4.57	1.68	-0.95	0.40	0.79	0.70	0.79
Current account balance/GDP	5.60	4.12	0.49	6.88	9.55	6.98	4.97	4.99	5.11	5.10
Gross external financing needs/CAR&FXR	123.70	122.23	120.77	114.23	115.17	125.80	120.70	121.25	120.38	119.68
Narrow net external debt/CAR	6.30	0.81	-2.51	6.89	28.76	-0.07	-2.52	-2.49	-2.25	-1.81
GG balance/GDP	1.29	1.34	-3.06	-0.31	1.20	0.60	0.50	0.50	0.35	0.25
GG net debt/GDP	17.38	15.54	18.71	18.53	16.58	15.69	14.86	14.01	13.36	12.81
CPI inflation	0.94	0.36	-0.73	0.58	2.84	2.14	1.40	1.30	1.10	1.10
Bank credit to resident private sector/GDP	162.31	167.45	176.46	171.60	167.51	167.54	168.91	169.88	171.19	172.34

United Kingdom (AA/Stable/A-1+)

• Analyst: maxim.rybnikov@spglobal.com
• Latest publication: United Kingdom 'AA/A-1+' Ratings Affirmed; Outlook Stable, April 22, 2024

Rating score snapshot:

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 5
• Monetary assessment: 1

Outlook: Stable

The stable outlook reflects the U.K.'s resilient economic performance despite multiple headwinds, as well as our expectation that general government deficits will steadily moderate over the next two to three years. This is balanced against risks stemming from the U.K.'s constrained fiscal position, characterized by elevated net general government debt amid higher interest rates and possible spending pressures given the upcoming general election (due January 2025 at the latest). Under our base-case projections, net general government debt modestly declines from 2025 but the primary budgetary position remains in deficit through 2027.

Downside scenario

We could lower the ratings on the U.K. if its fiscal performance significantly weakened compared with our forecast, in turn reducing the government's policy headroom to react to future economic shocks.

Upside scenario

We could raise the ratings if the U.K.'s fiscal performance strengthened, with reduced downside risks to budgetary performance and stabilizing net general government debt. This could result, for example, from stronger-than-expected growth or additional medium-term fiscal consolidation measures enacted by the government.

Table 32

United Kingdom
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	43.22	42.69	40.22	46.87	45.70	49.17	52.44	53.44	54.58	55.74
GDP growth	1.40	1.64	-10.36	8.67	4.35	0.10	0.60	1.20	1.70	1.70
GDP per capita growth	0.80	1.09	-10.74	8.76	3.47	-0.39	0.10	0.70	1.19	1.19
Current account balance/GDP	-3.93	-2.69	-2.87	-0.47	-3.08	-3.29	-3.01	-2.93	-2.82	-2.67
Gross external financing needs/CAR&FXR	737.65	721.54	869.79	843.51	733.40	710.56	740.55	734.18	719.09	704.77
Narrow net external debt/CAR	218.51	252.98	343.27	290.33	203.88	220.29	234.53	238.39	237.66	236.47
GG balance/GDP	-2.30	-2.48	-13.14	-7.86	-4.72	-5.87	-4.50	-3.80	-3.50	-3.20
GG net debt/GDP	82.79	81.88	99.52	98.34	96.75	98.27	99.07	99.31	99.04	98.49
CPI inflation	2.42	1.79	0.83	2.67	9.05	7.23	2.80	2.40	2.10	2.00
Bank credit to resident private sector/GDP	133.71	132.29	146.42	137.98	129.60	120.81	118.58	116.83	114.87	112.95
e--Estimate.

Primary Credit Analyst:	Frank Gill, Madrid + 34 91 788 7213; frank.gill@spglobal.com
Secondary Contact:	Riccardo Bellesia, Milan +39 272111229; riccardo.bellesia@spglobal.com
Additional Contact:	Sovereign and IPF EMEA; SOVIPF@spglobal.com