The Netherlands, the fifth-biggest eurozone country, had its “AAA” grade cut by Standard & Poor’s, which cited a weaker economic-growth outlook.
“The Netherlands’ growth prospects are now weaker than we had previously anticipated, and the real gross domestic product per capita trend growth rate is persistently lower than that of peers at similarly high levels of economic development,” S&P said yesterday.
The country’s rating was lowered to “AA+,” while the outlook was raised to “stable” from “negative.”
Dutch Finance Minister Jeroen Dijsselbloem called the rating cut “disappointing” and said he does not foresee a “substantial impact” on the country’s interest rates.
Investors often ignore ratings, as evidenced by the rally in US Treasuries after the US lost its top grade at S&P in 2011.
The Dutch economy has gone through three recessions since the global financial crisis started in 2008. S&P in January last year changed the outlook for the Netherlands to “negative,” citing at least a one-in-three chance that the rating would be lowered in last year or this year if the economy further deteriorated.
“We do not anticipate that real economic output will surpass 2008 levels before 2017, and believe that the strong contribution of net exports to growth has not been enough to offset a weak domestic economy,” S&P said. “Consumer spending has been dampened by high household debt levels and falling house prices.”
The Dutch economy emerged from a year-long recession in the third quarter, with GDP rising 0.1 percent from the prior three months as investments rose and exports benefited from a nascent recovery in the eurozone.
The European Commission forecast on Nov. 5 that the Dutch economy will contract 1 percent this year, more than twice the projected eurozone contraction, before growing 0.2 percent in next year.
Among eurozone nations, Germany, Finland and Luxembourg still hold “AAA” ratings at S&P. The Netherlands retains the top rating at Moody’s and Fitch.
“The Netherlands continues to be one of the most creditworthy countries in the world,” Dijsselbloem said in a statement.
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