12.07.201410:38:00UTC+00Fitch Lifts Dutch Rating Outlook To Stable; Maintains Serbia's Ratings

Fitch Ratings raised the outlook on the Netherlands' ratings citing marked improvement in public finances, while maintaining the ratings as well as outlook on Serbia.

The outlook on the Netherlands' 'AAA' rating was lifted to 'stable' from 'negative'. The agency does not currently anticipate developments with a high likelihood of a rating change.

Due to improved growth projections and lower fiscal deficit forecasts, the outlook for public finances improved markedly. It estimates gross general government debt to peak at 75 percent of GDP in 2014. The public debt dynamics are within the tolerance of a 'AAA' rating, it said.

The agency said the 'AAA' rating reflects that the economy is flexible and diversified. The economy benefits from strong domestic institutions, sound budgetary management and historically broad public and political consensus in support of fiscal discipline.

The rating agency also affirmed the credit ratings of Serbia at 'B+' with 'stable' outlook. Fitch noted that the newly elected government benefits from a strong mandate to implement its ambitious reform programme.

Although debt dynamics remain challenging, Fitch expects some consolidation in the coming years. Further, Fitch expects public debt to stabilize at about 76 percent of GDP by 2016-17, but interest payments as a proportion of revenue will remain relatively low.

The 'stable' outlook reflects Fitch's assessment that upside and downside risks to the rating are currently well balanced.