/EATINGS: S&P: New Zealand's Ratings Could Come Under Pressure (BBG)

BBG run comments from Anthony Walker, a director of sovereign ratings for Australia, New Zealand and the Pacific at S&P.

• Walker tells BBG that “it is catching our attention, the persistently weak and worsening current account position of the New Zealand sovereign, particularly given that it has been quite weak the last year or two and our forecasts are for it to narrow.”
• “This is an important forecast because we believe that the rating could come under pressure if the current account deficit is persistently weak, and it is actually weaker than we were expecting.”
• “We would need to see the current account deficit narrow over the next 12 to 18 months and if it doesn’t there is going to be increased pressure on the AA+ rating.”
• “New Zealand imports a lot of material and reconstruction work is going to mean more imports as well, so that could also play back to the weaker external position. So there’s a few moving pieces here, we’re really interested in seeing what the budget is doing.”