Cyprus Receives Ratings Upgrade; Belgium's Outlook Downgraded

(RTTNews) - Moody's Investors Service upgraded Cyprus' credit rating and raised its outlook to stable on Friday citing the government's ability to address key challenges. Elsewhere, Standard & Poor's maintained the ratings of Spain at 'BBB'.

Belgium's rating outlook was downgraded by Fitch Ratings as the budget deficit reduction plans stalled.

Cyprus

Moody's raised Cyprus's sovereign rating to 'B3' from 'Caa3' as the government made progress in addressing the country's key challenges with respect to macroeconomic stability, fiscal consolidation and banking sector stability.

The outlook on ratings was lifted to stable from positive. It reflects a balance of risks.

Spain

Spain's sovereign rating was maintained at 'BBB' and the outlook remains stable. Substantial structural reforms since 2010 improved the competitiveness and flexibility, Standard & Poor's Ratings Services said.

Uncertainties about economic performance remain, however, ahead of next year's regional and general elections and in the face of weakening external demand, it noted.

Belgium

Fitch Ratings downgraded the outlook on Belgium's 'AA' sovereign rating to negative from stable. The agency said the drivers for the revision was stalled budget deficit reduction and worsened growth outlook.

The general government deficit is estimated to be around 3 percent of GDP this year, 0.6 percent above the original 2014 budget target. The draft 2015 budget indicates a slower path of budget deficit reduction in 2015 and 2016.

The agency revised down its 2014 growth forecast to 1 percent from 1.2 percent in the previous review in May 2014, owing to the weak outturn in the second quarter of 2014.

Czech Republic

Fitch Ratings retained the sovereign ratings of the Czech Republic at 'A+'. The rating agency observed that the economy is undergoing a domestic-driven economic recovery and the government plans to ease fiscal policy and accommodate a stronger economic recovery. The outlook on the rating remains stable.

Georgia

S&P maintained sovereign rating of Georgia at 'BB-' with stable outlook. The agency said the ratings were constrained by its high external vulnerabilities, limited monetary flexibility and low GDP per capita.

However, controlled public finances, a low government debt burden and the commitment of the government to broad policy stability offset these risks, it said.