In the eyes of credit rating agency Finch, the Netherlands remains a very creditworthy country. The agency therefore retains AAA status, the highest possible score. The ‘triple A’ lets investors know that the Dutch State will repay loans on time. This trust allows the State to borrow money cheaper.
Fitch points, among other things, to the open economy of the Netherlands, which is also flexible and adds a lot of value. Our country is also effectively managed, according to the rating agency. The additional expenditure to help the economy through the corona crisis has increased the debt position, but the Netherlands has a history of solid financial policy and there are already plans to bring national debt back into line from 2022, Fitch writes.
The Dutch economy shrank by 3.7 percent in 2020, which is relatively limited compared to the 6.6 percent decline in the eurozone and 4.9 percent in Germany. Fitch believes that this is largely due to the flexibility of the Dutch economy and the effectiveness of the measures taken by the government.
The credit rating agency expects economic growth of 3.3 percent this year and 3.4 percent in 2022. Due to the current corona situation, most of that growth will only be reflected in the second half of the year. The economy should be back to pre-pandemic levels by the end of this year. Unemployment may, however, rise somewhat if aid measures such as the NOW scheme are discontinued later this year.
The political situation does, however, give some uncertainty. Fitch does not rule out the need for long-term formation due to the results of the House of Representatives elections. Nevertheless, that should not hinder proper management of the pandemic and the economy. The credit rating agency expects that the next government will also want to limit deficits and government debt in the medium term.
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