Updated MOODY’s rating for the City of Ostrava: AA3/negative

26/6 2023

In June 2023, the rating agency Moody's updated the City of Ostrava's credit rating, confirming its score as Aa3 with negative outlook.

Updated MOODY’s rating for the City of Ostrava: AA3/negative

The rating was awarded on the basis of a detailed analysis of the City’s current financial situation, its financial management during the preceding year, and the future financial outlook, taking into consideration environmental, social and governmental risks.

The Aa3 rating reflects Ostrava’s strengths and weaknesses. Key strengths include the City’s continuing trend of prudent and responsible financial management despite the slowdown of the national economy, its adequate liquidity despite the major investment projects planned for this year and next year, and the decreasing levels of debt in 2023 and 2024. Among the weaknesses are the ongoing decline in population – though this trend was reversed in 2022 for the first time in a number of years. As in other Czech cities, this population increase was mainly due to the arrival of refugees from the war in Ukraine; as a result, more people moved to Ostrava during last year than moved away.

The outlook is negative; this reflects the negative rating of the Czech Republic as a whole. Due to this, it is unlikely that the City’s rating will improve in the short term. Ostrava’s outlook could shift to stable if the Czech Republic’s rating did the same, conditional upon the City maintaining its current level of operating surpluses, strong liquidity and the continuing decrease in debt.