Saturday, November 26, 2011

Belgium Downgraded by Credit rating agency Standard & Poor - 26th Nov 2011

Credit rating agency Standard & Poor's downgraded Belgium Friday as the sovereign debt crisis continues to spread across the continent.

The rating change put Belgium's rating down one notch to AA. That's the S&P's fourth-highest rating is still investment grade. But the rating agency warned it is considering further cuts, assigning it a negative outlook.

S&P cited "renewed funding and market risk pressure" in the downgrade announcement, saying those risks are "increasing the perception of difficulties in the Belgian financial sector and in our opinion raising the likelihood that the sector will require more sovereign support."

Worries about the European economy falling into a new recession and what it means to Belgium's budget situation was also cited by the agency.

"With exports of over 80% of GDP, Belgium is one of the most open economies in the eurozone and is therefore in our opinion highly susceptible to any weakening of external demand," it said.

S&P says it expects Belgium's debt will equal about 93% of its gross domestic product at the end of this year and could soon top 100%. Read More