16 Jan 2015
Fitch affirms Germany at AAA; Outlook stable, possible GDP upside surprise
FXStreet (San Francisco) - Fitch Ratings affirmed Germany's sovereign rating at AAA with a stable outlook. The Agency remarks that the current rating reflects declining public debt path; economy growing; budget position favorable and low nominal interest rates.
According to Fitch, the weak euro and the low inflation could provide surprises to the upside from its initial projection of 2% growth in 2015.
Key quotes:
The general government debt to GDP ratio (GGGD) has started falling in Germany, unlike its 'AAA' rated eurozone peers and France (AA/Stable), UK (AA+/Stable) and the US (AAA/Stable).
The debt ratio declined for a second consecutive year, reaching a five-year low of 75.4% in 2Q14, after ending 2013 at 76.9%.
Fitch believes the government's targets to reduce public debt to below 70% of GDP by 2017 and to less than 60% within ten years are plausible.
Official forecasts for a balanced budget in 2015 and small surpluses from 2016 are plausible and Fitch believes it is unlikely the coalition will deviate from its current prudent fiscal policy stance.
In our July 2014 review, we expected the economy to expand by 2%. The weak euro and low inflation could provide some upside surprises to growth.
According to Fitch, the weak euro and the low inflation could provide surprises to the upside from its initial projection of 2% growth in 2015.
Key quotes:
The general government debt to GDP ratio (GGGD) has started falling in Germany, unlike its 'AAA' rated eurozone peers and France (AA/Stable), UK (AA+/Stable) and the US (AAA/Stable).
The debt ratio declined for a second consecutive year, reaching a five-year low of 75.4% in 2Q14, after ending 2013 at 76.9%.
Fitch believes the government's targets to reduce public debt to below 70% of GDP by 2017 and to less than 60% within ten years are plausible.
Official forecasts for a balanced budget in 2015 and small surpluses from 2016 are plausible and Fitch believes it is unlikely the coalition will deviate from its current prudent fiscal policy stance.
In our July 2014 review, we expected the economy to expand by 2%. The weak euro and low inflation could provide some upside surprises to growth.