Fitch assigns Switzerland AAA rating

02 May 2024 10:32

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London - Fitch Ratings has classed Switzerland’s Long-Term Foreign-Currency Issuer Default Rating as AAA. The international ratings agency further confirmed a stable outlook for Switzerland.

According to a press release, the international ratings agency Fitch Ratings has affirmed Switzerland’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at AAA with a stable outlook. The press release from Fitch Ratings states that Switzerland’s AAA ratings reflect an economy with high added value with income and governance indicators above the median level of the assessed countries, displaying a very strong net external creditor position and with the reserve currency status of the Swiss franc.

Macroeconomic stability is said to be supported by careful economic and fiscal policymaking and state debt is the lowest among the countries assessed at AAA as of 2023. The press release states that Fitch believes the integration of UBS and Credit Suisse proceeds without substantial risks.

Switzerland is characterized by strong public finances and a low level of debt. This is a rating strength for Switzerland, with government debt of just 26.9 percent of gross domestic product (GDP). Fitch expects public debt will decrease over the medium term in light of the nominal economic growth and stable primary surpluses. Fitch anticipates a general government surplus of 0.5 percent of GDP in 2024 and an increase to 0.8 percent in 2025.

Switzerland’s external balance is a key rating strength according to Fitch, with an external creditor position of 105.3 percent of GDP at the end of 2023, which is 4.4 times greater than the current AAA median. This is supported by consistent, high current account surpluses with on average 5.7 percent of GDP in the five years to 2023. The country’s net foreign asset position is also high, at 82.6 percent of GDP (2023) and is the third highest among comparable countries. ce/gba 

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