Moody’s Ratings recently released an updated credit opinion for the state of North Dakota, reaffirming the state’s strong financial position and maintaining the state credit rating at the second highest level – Aa1 stable.
“The strong Moody’s credit rating largely reflects our substantial reserves, low debt levels and a solid track record of responsible budget management,” said Office of Management and Budget Director Joe Morrissette. “These strengths position North Dakota to maintain flexibility and continue essential state services and programs, even amid oil price fluctuations or broader economic slowdowns.”
Morrissette added that effective leadership from both the administration and legislature has allowed North Dakota to sustain the conservative state fiscal management practices needed to maintain such a rating.
The report notes that the North Dakota ”is well positioned to weather potential economic and revenue volatility because of its history of conservative revenue forecasting, low fixed costs and strong reserves.” However, the state’s economy is uniquely reliant on volatile commodities, and Moody’s notes the importance of continuing strong reserve balances in the future: “[The] state’s relatively volatile economic and revenue composition will continue to challenge its budget predictability, making above-average reserve levels an important credit stabilizer.”
A Moody's credit rating directly impacts the state's borrowing costs and overall financial health. A higher rating indicates a lower risk of default, leading to lower interest rates on bonds and other debt instruments.
Read the full state of North Dakota Moody’s credit analysis.