Fitch Downgrades Austria’s Credit Rating Amid Rising Public Debt

Vienna: Fitch Ratings has downgraded Austria's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'AA' from 'AA+'. The Outlook is Stable. The agency attributed the downgrade to financial challenges and economic issues facing Austria, most notably the rising public debt. It explained that Austria's financial and economic outlook has deteriorated since the last review, with the 2024 budget deficit increasing to 4.7% of GDP, up from 3.7%. According to Emirates News Agency, Fitch's report expects the public debt-to-GDP ratio to continue increasing in the medium term, stabilising at around 86% of GDP between 2027 and 2029. At the end of last year, Austria's government debt reached 81.8% of GDP, significantly higher than the previous forecast of 76.6%. Furthermore, Austria's economy contracted by 1.2% last year, marking the second consecutive year of decline. The current economic output is 3.3% lower than previous levels.