Since our last publication in July 2015, Iceland has made further progress toward resolving the issues preventing the lifting of capital controls. We also expect general government indebtedness to decline and interest expenditures to reduce over the next four years. We are therefore raising our long-term ratings on Iceland by one notch, to 'BBB+'. The stable outlook balances the upside potential stemming from materially faster-than-anticipated reduction in public debt levels against downside risks, primarily stemming from our expectation of sizable wage hikes. On Jan. 15, 2016, Standard&Poor's Ratings Services raised its long-term sovereign credit ratings on Iceland to 'BBB+' from 'BBB'. At the same time, we affirmed the short-term ratings at 'A-2'. We have also raised the Transfer
