REGINA – Moody’s Investors Service has given Saskatchewan its highest credit rating.
It raised the province’s rating to Aaa from Aa1 and says the upgrade applies to both domestic and foreign currency debt issued by Saskatchewan.
Kathrin Heitmann, Moody’s lead analyst for Saskatchewan, says the rating reflects the province’s fiscal discipline and sustained low debt levels, which underscore prudent financial management practices.
She says Moody’s views Saskatchewan as well positioned to maintain substantial financial strength despite its economic and financial exposure to a volatile primary sector.
Moody’s says it expects that the current trend of sound financial operations will be maintained given the planned continuation of stringent expenditure controls, conservative budgetary forecasting and commitment to low core operating government debt.
It says Saskatchewan has in the past used high surpluses stemming from non-renewable resource revenues to reduce core government debt and has maintained low debt levels despite recent volatility in potash prices and increased infrastructure spending.
“Moody’s expects real economic growth to slow down in 2014 to around two per cent, in line with the budget, and pick up modestly in 2015,” Moody’s said in a news release.
“Slower anticipated growth in 2014 reflects a drop in agricultural production following the record crop of 2013, as well as muted activity in the mining sector. Positive population growth since 2007 and some diversity across different natural resources should support the economy going forward.”
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