S&P confirms AA- rating for Czech Republic

International rating agency S&P Global Ratings has confirmed the Czech Republic's long-term foreign currency sovereign credit rating at AA- with a stable outlook.

S&P said the low government debt level, sound public finances and flexible monetary policy were the main positive factors.

However, S&P noted the chronic labour shortage is restricting growth. It forecasts the Czech economic growth as slowing to about 2.5 percent a year in the near term, “due to visible supply-side barriers".

Despite a high degree of political fragmentation, governments have demonstrated strong support for European Union membership, and improving the business environment and fiscal responsibility, the agency said.