Fitch affirms Germany at ‘AAA’; outlook stable – Reuters

Fitch Ratings has affirmed Germany’s long-term foreign-currency issuer default rating (IDR) at ‘AAA’ with a stable outlook, Reuters reported on Friday.

Key takeaways from Fitch Ratings’  publication

• The ‘AAA’ ratings reflect Germany’s diversified, high value-added economy, strong institutions and history of sound public debt management.
• Challenging coalition dynamics weaken economic reform prospects, but we continue to expect broad continuity in macroeconomic policy.  
• Domestic demand continues to drive above-trend GDP growth, which Fitch forecasts at 2.3% this year, taking the five-year average to 2.0%, close to the ‘AAA’ median of 2.3%.  
• Investment growth is supported by favourable credit conditions, high capacity utilisation, solid profit growth and a buoyant construction sector.
• Germany’s strong net external position is expected to further improve, supported by large current account surpluses that reflect sustained export competitiveness and high income from foreign assets but also an investment rate below the ‘AAA’ median.