Citi's sovereign ratings team led by Michael Saunders, Robert Crossley, and Peter Goves sees the total number top-rated countries shrinking further in coming years.
Over the longer-term, given Citi’s global economic projections and fundamentally weak backdrop, we continue to expect downwards rating pressure. The US is currently on Negative Outlook by both Moody’s and S&P and we continue to expect a one-notch downgrade over the next 2-3 years. We also envisage downwards ratings pressure for Japan over the next 2-3 years, predicated on longer-term debt sustainability trends. Canada and the Scandinavian countries are the only countries covered in our Sovereign Ratings Outlook that we believe rating agencies will maintain a “AAA Stable” status both in the near- and longer-term.