Tonight Fitch Ratings has issued a statement that the sovereign rating of New Zealand is in jeopardy.
Fitch lowers New Zealand’s sovereign outlook to Negative from Positive; rating affirmed at AA+
Outlook cut reflects medium term outlook
New Zealand has large current account deficit and rising foreign indebtedness; may need stronger fiscal adjustment. Sees credit fundamentals and public finances, but economy may fall into low-growth trap.
New Zealand has large current account deficit and rising foreign indebtedness; may need stronger fiscal adjustment. Sees credit fundamentals and public finances, but economy may fall into low-growth trap.
Conversely, a continuing deterioration in the net external debt and liability position would likely lead to a downgrade of New Zealand”s sovereign ratings. The typical duration of a Fitch sovereign rating Outlook is 12-24 months and implies a greater than 50% chance that the rating will be downgraded.
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