Standard and Poor's raised The Netherlands back to its top AAA credit rating on Friday, saying the eurozone nation's economic recovery has gained traction. "The upgrade reflects our view of the strengthening of the economic recovery in The Netherlands, with domestic demand growing strongly as a result of increases in real disposable income, employment, and investment activity," the ratings agency said in a statement.
Standard and Poor's, which lowered The Netherland's rating in November 2013, gave the country a stable outlook and pointed to "future growth prospects are stronger than we had previously expected". It cited the nation's "long track record of prudent and flexible macroeconomic policies reflected in, among other things, its improving budgetary position" as its reasons for rasing the rating.
After the Dutch economy expanded just one percent last year, the ratings agency said it expects growth will increase to almost two percent annually through 2018. S&P said this was due to a "recovery in domestic demand that, after several years of stagnation during which households paid down what are still very high private debt levels, is stronger than we had previously expected". Private consumption was also benefitting from rising disposable incomes thanks to low in inflation and a drop in oil prices, the agency added.
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