DBRS cuts Belgium

DBRS said it lowered the Kingdom of Belgium’s long-term foreign- and local-currency issuer ratings to AA from AA (high) and changed the trend to stable from negative.

“The downgrade reflects DBRS Morningstar’s assessment that the government’s budgetary pressures will remain somewhat elevated over the next years, with the fiscal deficit keeping the debt ratio at a high level. Budgetary pressures, together with the absence of a clear fiscal strategy, pose a challenge to the medium-term fiscal outlook. While in the near-term the fiscal position has improved, reflecting the decrease of Covid-19-related budgetary pressures, the government’s budget deficits are projected to remain relatively large over the medium-term,” the agency said in a press release.

“Despite the challenging medium-term fiscal outlook, DBRS Morningstar regards the trend on the ratings as stable. The ratings are supported at the current levels by important credit strengths. These include Belgium’s wealthy and diversified economy, its strong net external asset position, large household savings and high institutional quality,” the agency added.

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