FITCH classifies Austria's creditworthiness - what does that mean for us?

FITCH classifies Austria's creditworthiness - what does that mean for us?

The rating agency Fitch downgraded Austria's credit rating, namely the long -term foreign state bonds from "AA Plus" to "AA". This step was published on June 7, 2025 and is related to the weaker development of public finances compared to the real economy. The overall-state deficit was 4.7 percent of gross domestic product (GDP) last year and thus exceeded the forecast from Fitch, which was 3.7 percent, as our Central Europe

The main reasons for the fiscal deviation are an worsened economic environment and excessive expenses at the local level. In this context, Austria's debt rate is estimated to be 81.8 percent of GDP for 2024, which is a significant increase compared to the previous forecast of 76.6 percent. This quota is far above the median of other countries with "AA" rating, which is 48.8 percent. Austria's economy shrunk by 1.2 percent in 2024, which marks the second year in a row with declining economic performance.

stable but challenging prospects

Despite the downgrading, the view for the new country rating remains stable. According to Fitch, the debt rate is to be stabilized at around 81 percent between 2027 and 2029, which is important for long -term financial stability. Economic stagnation is expected to continue in the near future, with growth of 1.2 percent expected in the coming year. These forecasts point to persistent fiscal and macroeconomic challenges that go hand in hand with an increase in public debt, such as the The press emphasized.

The government has already launched a consolidation program to reverse fiscal relaxation measures. Nevertheless, there is a threatening economic weakness that could endanger the growth of the income. According to FITCH, there are also political uncertainties after the 2024 parliamentary elections, which could make financial and economic decisions more difficult.

The consequences of downgrading

A downgrading of the creditworthiness could mean that loans become more expensive for Austria. However, the creditworthiness remains in the investment grade category and has a high credit assessment, so that the risk of default is classified as low. However, experts warn that the downgrading could increase the loan costs, which can have a negative impact on the economic situation of the country, as well as the Kurier . In summary, the downgrading of Fitch shows the continuing difficulties in front of which Austria is facing. A costly environment for loans and the need to stabilize public debt will shape public financial policy in the coming years.