AAA rating by S&P confirmed – stable outlook
In its research update of 31 May 2021, the rating agency S&P Global once again confirmed Liechtenstein's country rating of AAA – with a stable outlook. It is especially positive that the outlook remains stable, despite the COVID-19 crisis and possible second-round effects.
By once again awarding Liechtenstein its highest rating of AAA, S&P Global recognises the country's high level of stability. Only very few countries in the world still receive this highest rating. In particular, S&P emphasises the excellent financial situation of the public budgets, which have created the necessary financial room for manoeuvre especially during the pandemic. This kept damage to the economy and society to a minimum. S&P expects this resilience to continue, especially given that Liechtenstein's proverbial stability has manifested itself in very forward-looking and proactive policies over the last few years. S&P emphasises that thanks to these policies, Liechtenstein is well prepared to handle upcoming challenges and to maintain its strong fiscal and economic position.
Key strengths highlighted by S&P include Liechtenstein's access to the two economic areas of Switzerland and the European Economic Area and its broadly diversified economy. According to S&P, this economic diversification is aided by the high proportion of small and medium-sized enterprises, including several world market leaders in their niche markets. Liechtenstein's strong manufacturing base further distinguishes the country from other small jurisdictions with large financial centres.
On the part of the Liechtenstein Bankers Association (LBA), we are very pleased that Liechtenstein's AAA rating has once again been confirmed, and we are grateful that the banking centre – with its sustainable, risk-conscious business models (Tier 1 capital ratio of more than 20 %) – is able to make a significant contribution to this top rating. At the same time, the LBA is equally aware that this good situation is not guaranteed. For this reason, we continue to strongly advocate for Liechtenstein membership in the International Monetary Fund (IMF). IMF membership would strengthen Liechtenstein's stability and resilience even further.
S&P's comprehensive research update can be downloaded here.
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