(bpt pse - no franco in the office) Fitch gives Dutch thumbs up

26th July 2011, Comments 0 comments

Fitch ratings agency Tuesday gave the Netherlands top marks in its yearly credit rating, saying the country's outlook remained stable with economic recovery under way.

"The Netherlands again obtained the highest rating possible," Fitch's primary analyst Chris Pryce told AFP from London.

"The Netherlands has a very secure economy and was very unlikely to default on its debt, hence the AAA rating," he added.

Fitch said in its press release the European country scored AAA ratings in its long term foreign and local currency issuer default ratings (IDR) as well as a top F1+ rating for its short term foreign currency IDR.

"The Netherlands' traditional fiscal strengths facilitated a vigorous response to the global financial crisis, the associated need for financial sector support and the ensuing domestic recession," said Pryce.

He added: "Economic recovery is now under way, the financial sector has stabilised, fiscal stimulus is being withdrawn and general government debt is expected to peak at 65 percent of GDP in 2012."

The soundness of Dutch banking, which took a considerable knock following the 2008 economic crisis, has also improved significantly, the Fitch statement said.

The Dutch government nationalised at least one bank in 2008 at the height of the crisis and injected capital into several other banks as well as offering a 200-billion-euro ($290 million) loan guarantee programme.

"Banks are now repaying their loans for capital support," it said adding however that risks to funding remained "reflecting banks' heavy reliance on wholesale funding."

But it said "the Netherlands' sovereign ratings are underpinned by its advanced, well-diversified economy, strong educational and skill levels, flexible labour market and superior income per capita."

Added Pryce: "The Dutch rating has been AAA for many years and the outlook was likely that it will stay where it is."

© 2011 AFP

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