The Cook Islands has had its long-term credit rating raised from B+ to BB- by top international ratings service Standards and Poors.
The rating is the fourth for the country since its first Standards and Poors rating in 1998 and shows a steady improvement.
Standards and Poors credit analyst Rick Sheperd says the upgrade is the result of the Cooks' improved financial flexibility, brought about by lower net debt, small fiscal surpluses and strong economic growth.
But he warns that the Cooks ratings continues to be constrained by the vulnerability of a small and narrowly based economy, and the risks to reserves in government finances from what he describes as a personality-based, patronage political culture.
"The definition of the double B rating, or double B minus, is that the country still faces ongoing uncertainty, or exposure to adverse business, commercial or economic reasons, and certainly that's one of the risks we see, is that the tourism industry is crucial to the Cook Islands. There's no diversity, for instance, if tourists decide that the Cook Islands is no longer the flavour of the month."