S&P confirms AAA rating for Liechtenstein – stable outlook
In its research update of the end of May 2022, the rating agency Standard & Poor's once again confirms Liechtenstein's AAA country rating - with a stable outlook. On a positive note, this excellent assessment was made despite the currently extremely high degree of global political and economic uncertainties as well as the expected second-round effects as a result of the war in Ukraine.
In its six-month review the international rating agency Standard & Poor's, once again awarded Liechtenstein the top rating of triple-A - with a stable outlook. Liechtenstein thus remains one of only a few countries worldwide with this top rating. In its report, the rating agency particularly highlights the resilient and very diversified economy, the strong financial situation of public budgets, the all over very low level of debt as well as the direct access to the two large economic areas in Europe (EEA and Switzerland). The stable outlook for the rating takes into account the current worldwide extremely high degree of political and economic uncertainties. S&P assumes that the terrible war in Ukraine and the resulting high commodity prices will influence Liechtenstein’s economy. However, the robust economy is likely to be only indirectly affected and to be able to compensate the negative impacts expected in the medium term. This also applies for the disrupted international supply chains caused by China's ongoing zero-covid strategy. However, both factors lead to a slight downward revision of the GDP growth forecast for 2022 to 0.4%.
The Liechtenstein Bankers Association is very pleased that Liechtenstein's triple-A rating has once again been confirmed. Considering the major political and economic uncertainties of the past two years, this cannot be taken for granted. We are convinced that the banking centre with its sustainable, risk-conscious business models (core capital ratio of over 20%) has made an important contribution to this top rating. At the same time, however, the current assessment shows that this positive situation is not guaranteed. Therefore, we continue to advocate Liechtenstein's membership in the International Monetary Fund (IMF). IMF membership would further strengthen Liechtenstein's stability and resilience.
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