Fitch down­grades Bel­gian debt rat­ing; ‘sta­ble’ out­look

Kuwait Times - - BUSINESS -

The rat­ings agency Fitch on Fri­day down­graded Bel­gium’s longterm debt rat­ing one notch to AA-, cit­ing grow­ing lev­els of sovereign debt, but said the Euro­pean na­tion’s out­look was sta­ble. Bel­gian ef­forts to stim­u­late growth through struc­tural re­forms since a new govern­ment took power in 2014 have pushed the coun­try’s fis­cal tar­gets up­ward, with gross debt fore­cast to be 107 per­cent of GDP in 2016, the agency said in a state­ment.

“This per­sis­tent fis­cal slip­page moves back the first year with sub­stan­tial debt re­duc­tion to 2019, two years later than pre­vi­ously pro­jected by Fitch in Novem­ber 2014, when the agency placed Bel­gium’s rat­ing on neg­a­tive out­look,” the state­ment said.

With tax rev­enues fall­ing, the agency is now fore­cast­ing a three per­cent deficit for the Bel­gian bud­get in 2016, up three tenths from a prior es­ti­mate.

Ex­tra­or­di­nary costs as­so­ci­ated with the refugee cri­sis as well as se­cu­rity mea­sures in re­sponse to ter­ror­ist at­tacks in France and Bel­gium also pushed the deficit fore­cast higher by 0.2 per­cent of GDP, ac­cord­ing to Fitch. “Re­peated slip­page against govern­ment tar­gets is neg­a­tively af­fect­ing fis­cal pol­icy cred­i­bil­ity, and re­duces con­fi­dence in the abil­ity to meet fu­ture fis­cal tar­gets.” — AFP

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