Fitch decreased the credit rating of Austria

Fitch decreased the credit rating of Austria from its top AAA rating, saying that the national debt will reach a higher peak than previously thought. Fitch, which lowered the rating of Austria by one notch to AA+ indicates that the share of public debt in GDP is expected to peak at around 89% this year – higher value of all countries rated AAA, except US and on par with the UK. The decrease rating equates to that of the Standard & Poor’s.

Fitch notes that the debt dynamics of Austria has deteriorated significantly in a short time, indicating the impact of bank restructuring on public finances. The Agency argues that progress in the restructuring of medium-sized banks that were in serious crisis during the economic slowdown was weak.

The rating agency warned that further reductions are possible if the country is not progressing with the reduction of public debt. Fitch, however, may again raise the rating of Austria in the event of a decline in the ratio of government debt to GDP. As to Ukraine agency lowered its rating to CC. Fitch said that some kind of failure seems likely. The Agency notes that the rescue program of the International Monetary Fund, which was released this week, will help to finance the country, but the restructuring of external debt to private creditors seem possible.

Fitch also affirmed the credit ratings of Ireland and Abu Dhabi, and raised the rating of Uganda because of its prudent macroeconomic policies.