LONDON, Nov 27 (Reuters) - Standard & Poor's (S&P) raised its sovereign ratings on Slovakia to "A+" from "A" on Thursday, saying that the continued improvement in the country's economic competitiveness would be supported by its 2009 entry into the euro zone. The ratings agency, which also affirmed Slovakia's "A-1" short-term ratings, said the upgrade was also supported by the country's modest debt burden and its investment-oriented policies.
"The upgrade reflects the prospect of continued improvement in Slovakia's competitiveness and potential as the economy expands and diversifies in the wake of a series of business-friendly reforms," S&P said.
Although Slovakia's impending adoption of the common currency would reduce its economic policy flexibility, euro zone membership would also mitigate its balance of payments risk and consequently boost investment, S&P said.
However, Slovakia would have to undertake further public sector reforms tackling structural unemployment to sustain balanced and sustainable economic growth, it added. Rival ratings agencies Fitch and Moody's have rated Slovakia "A+" and "A-1" respectively. (Reporting by Sebastian Tong; David Stamp)