Title: S&P cuts Montenegro rating further into junk Post by: Psalm 51:17 on June 13, 2012, 01:56:09 pm S&P cuts Montenegro rating further into junk 13 June 2012, by Melodie Warner (MarketWatch) http://www.marketwatch.com/story/sp-cuts-montenegro-rating-further-into-junk-2012-06-13 Standard & Poor's Ratings Services lowered the Republic of Montenegro's rating one notch further into junk territory, citing increasing challenges to the country's efforts to stabilize its public debt levels. The ratings company cut Montenegro's long-term foreign and local currency sovereign credit ratings to double-B-minus from double-B, putting it three steps below investment grade. The outlook is stable. Montenegro, a tiny nation on the Adriatic sea whose population is roughly 660,000, was expected to enter accession talks with the European Union this month. S&P said the weakening economic environment, pressures arising from contingent liabilities, and diminishing external bank financing are challenging the government's efforts to stabilize public debt levels. The firm also projects gross domestic product growth will decelerate to 0.5% in 2012, after a moderate recovery during 2010-2011. S&P also said the general government may not be able to meet its revised deficit target of 2.5% of GDP this year amid rising unemployment and one-off early retirement commitments on social security transfers. |