Moody's lifts Belgium's outlook rating

The American credit rating agency Moody's has adjusted its outlook on Belgium to stable, coming from negative. To explain their decision, they cite a stabilization of the Belgian banking sector which leads to receding risks on the government's balance sheet.

Moody's lifted their outlook on Belgium's Aa3-rated government as the banking sector is stabilizing, which leads to smaller risks on the government's balance sheet. "The receding risk that contingent liabilities from the banking sector will crystallise onto the government balance sheet. The sector's receding risks are reflected in the recent stabilisation of the rating agency's outlook for the banking system", a statement says.

Moody's added that they expect that the government's fiscal position will continue to improve "and support a reversal in government debt at around 100% of GDP in 2014-15".

At the same time, Moody's confirm Belgium's Aa3 rating, citing two reasons: (1) the robustness of the economy with limited external imbalances backed by strong institutions. (2) Still high government debt, which is expected to diminish only gradually over the medium term.

Earlier, Standard & Poor's had already lifted their prospects for Belgium.