Fitch raises Belgium’s outlook to stable

Belgium has had the outlook on its AA credit rating raised by Fitch Ratings, which cited deficit reductions and a decrease in borrowing costs amid contained risks from bank rescues and the eurozone debt crisis, writes Bloomberg’s John Martens. Fitch affirmed Belgium’s AA rating and revised the outlook on the nation’s debt to stable from negative, according to a statement yesterday. Belgium’s budget deficit probably narrowed to 2.9% of GDP last year and its public debt may have peaked at close to 100% of GDP, Fitch said. “Public debt, Belgium’s main rating weakness, has peaked in 2012/2013, earlier and only moderately higher than in France and the UK,” Fitch analysts Michele Napolitano and Douglas Renwick said in the statement. “Debt dynamics are relatively robust to stylised shocks, mainly owing to a primary surplus in 2012.” Investors have rewarded Belgium for sticking to its deficit targets since it took the country a record 541 days to form a government after the June 2010 elections. It sold 10-year bonds at a record-low yield of 2.252% in the most recent auction on November 26. As measured by credit-default swap prices compiled by Bloomberg, Belgium’s debt is now a better credit than France, rated two steps higher at AAA by Fitch.