Fitch and DBRS Morningstar have confirmed Luxembourg's AAA rating
Luxembourg’s AAA rating was confirmed by credit rating agencies Fitch and DBRS Morningstar on Friday.
Despite the economic crisis facing the country as a result of the pandemic, they confirmed Luxembourg had the necessary capacity to cope with the fall-out thanks to the country’s prudent fiscal policy. The economic measures mobilised by the government to supports businesses were said to have a considerable impact on public finances.
Luxembourg’s recession was expected to be less severe than the eurozone average and the agencies forecast a recovery to pre-crisis levels in 2021. The pace of the recovery remains uncertain, but the agencies said continuing a prudent economic and financial policy will make risks manageable.
DBRS also acknowledges the government's fiscal transparency efforts and said it should add to the country’s attractiveness as an investment destination.
In its 2020 summer forecast, the European Commission forecast year on year GDP change of -8.7% in the eurozone and -8.3% in the EU. In Luxembourg, the forecast was between -6% and -6.9%.