AMSTERDAM/NEW YORK, Feb 5 (Reuters) - Rating agency Fitch cut its outlook on the Netherlands’ AAA credit rating to negative on Tuesday, citing worries about falling house prices, the banking system and the high state debt burden.
The other major rating agencies, Moody’s and Standard & Poor‘s, have already put their Netherlands’ ratings on a negative outlook. The country is one of just four in the 17-nation euro zone to have kept a full set of top ratings.
“The leveraged Dutch economy has suffered a number of shocks,” Fitch said in a statement.
It pointed to a sharp fall in house prices which it said was worse than it had previously expected. Fitch recently revised its projected peak-to-trough decline to 25 percent from 18 percent, and said this will continue to depress household spending.
Persistent banking system problems - as highlighted by last week’s decision to nationalise SNS Reaal, the fourth-largest banking and insurance group - and public debt levels that are higher than those among top-rated peers, rounded out the agency’s concerns.
However, Fitch said it does not see the nationalisation of SNS Reaal as sufficient grounds to trigger a downgrade of the Netherlands’ sovereign rating.
“Fitch’s affirmation of the Netherlands’ AAA sovereign rating is underpinned by the country’s flexible, diversified, high-value-added and competitive economy as well as its current account surpluses and positive net international investment position,” Fitch added.