Standard and Poor’s (S&P) lowered Saskatchewan’s credit rating to AA+ from AAA on Friday.
S&P’s credit rating change reflects the impact of persistently low resource prices, in particular oil and potash.
In a news release, the government calls the news disappointing, but points out that Saskatchewan continues to have the second highest credit ratings among provinces.
The S&P’s report noted that “despite continued negative GDP growth expected in 2016, in our view, the provincial economy is very strong”.
The report went on to say that projected real GDP growth should rebound to 2.5 per cent in 2017 and that “while the province’s economy remains primarily resource based, in our opinion, it is more diversified than that of Alberta and Newfoundland”.
The report also noted “we believe that the province’s credit profile is bolstered by its strong financial management,” that the result of the April 2016 election “reflects a broad political consensus on fiscal policies to enact structural reforms,” and that “the administration is capable and experienced and qualified to implement policy changes”.
As our economy improves, the government maintains it will continue to control spending and manage debt responsibly.