Strong fiscal fundamentals and steadily declining debt trajectory drive ratings upgrade; moderate growth potential and a high debt stock pose challenges.

Sustained fiscal improvements backed by sound long-term growth prospects drive the outlook revision. An elevated stock of public debt and exposure to global shocks as a small, open economy are challenges.

A prudent fiscal policy, sustained public debt reduction, a resilient debt profile and the gradual unwinding of economic imbalances drive the upgrade; a modest growth potential, high external debt and implicit liabilities are constraints.