Germany continues to be rated by the rating agency Standard & Poor’s (S&P) as a very reliable debtor.
The analysts confirmed the top rating AAA on Friday evening with a stable outlook.
Germany is using its financial scope to avert a possibly longer-lasting damage to its economy, the analysts commented on the measures that the federal government decided on in the wake of the corona pandemic, particularly the higher one New debt highlighted. S&P predicts that the German economy will shrink by 1.9 percent this year, real gross domestic product will then increase by 2.6 percent next year.
S&P also reaffirmed the AA credit rating with a stable outlook for France. The French government is likely to widen the budget deficit in the wake of the crisis. However, recent economic, budgetary and structural reforms have improved the chances of the French economy coping with the crisis.
Meanwhile, the rating agency Fitch has lowered the outlook for Belgium to negative from Stabil, but has retained the AA- rating. Analysts expect Belgium’s public finances to deteriorate significantly this year due to the Corona crisis. The interplay of reduced economic activity and necessary measures to contain the virus are likely to lead to a sharp rise in government debt.
Meanwhile, the Fitch analysts have raised the outlook for Cyprus to stable from negative, the rating BBB- has been confirmed. The Cypriot economy will also suffer from the pandemic; gross domestic product is expected to decline by more than 2 percent this year. However, it can be assumed that the virus was under control in the second half of this year. As a result, the economy is likely to experience a relatively strong recovery in the coming year.
Frankfurt (Dow Jones)