Dutch triple-A rating is safe

 
Tim Wallace
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HOLLAND will not hit its budget deficit target this year, Fitch warned yesterday, but should retain its top credit rating as its national debt is well below that of heavily indebted nations like the UK and Germany.

Fitch expects the deficit will come in at 4.5 per cent of GDP this year, and could miss next year’s three per cent target as a result of budget negotiations breaking down.

The main reason for the high deficit is the weak state of the economy – Fitch expects a 0.8 per cent contraction this year, hitting tax receipts and raising spending.

However, its triple-A credit rating should be safe, as its total debt, at 65.2 per cent of GDP, “is significantly below that of its larger triple-A peers, Germany, France, the UK and the US [all above 80 per cent].”