LOS ANGELES -- Following its positive January forecast for the state and local government sector, Standard & Poor’s said Thursday that it still believes sector-wide credit quality should remain relatively stable in 2013, despite possible impacts from the sequestration.

“While it may not be ideal fiscal policy in some respects, we don’t see sequestration itself as a sufficient enough source of drag on growth to derail the overall economic expansion,” analysts wrote in a report. “That said, we recognize that the effects of sequestration could affect regional economies differently.”

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