The outlook on Fiji’s long-term sovereign credit rating has been revised down from stable to negative by the international rating agency Standard and Poors.
The sovereign credit rating indicates the level of risk in investing in a specific country, and takes into account the political risks in that country.
Fiji’s sovereign credit rating remains at B.
Standard and Poors has downgraded the outlook for the rating’s future because of what it describes as a “quite dramatic fall in Fiji’s international reserves” – from $US618 million ($982 million) at the end of 2007 to $US431 million ($684 million) in December 2008.
The downgrade follows a similar action taken by Moody’s ratings agency in February.
Standard and Poor’s sovereign ratings analyst, Kyran Curry, said weak growth prospects especially in tourism, sugar and garments also contributed to Fiji’s downgraded outlook.
The outlook on Papua New Guinea and Cook Islands, remains unchanged.
Mr Curry says that at this stage, Papua New Guinea and Cook Islands have weathered the financial crisis better than many countries, but warns they remain vulnerable to low commodity prices and tourist numbers.