Netherlands Downgraded to AA by S&P

Standard & Poor’s lowered its credit rating for the Netherlands to AA plus from AAA on Friday, while lifting its outlook for the struggling economies of Spain and Cyprus.

Moritz Kraemer, chief sovereign ratings officer at S&P, told CNBC that the Netherlands’ downgrade by the S&P ratings committee was triggered by the country’s weak economic growth prospects.

“We see that both in recent history and in our projections, that the economic dynamism of the Dutch economy will lag behind what we would usually expect for sovereign economies at that level of development and prosperity,” he told CNBC on Friday. “So this has been the immediate trigger for the ratings decision.”

The agency’s report said it expects the country’s gross domestic product (GDP) to contract by 1.2 percent in 2013, before growing by 0.5 percent in 2014 and slowly accelerating to 1.5 percent by 2016. It argued that real economic output for the country will not surpass 2008 levels before 2017.

The cut means the only euro zone countries to retain their AAA rating at S&P are Finland, Germany and Luxembourg.
via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza