The rating is burdened by Austria’s high debt compared to comparable countries. “The stable outlook reflects our expectation that the national debt will show a gradual downward trend again this year after the strong increase last year,” said the rating agency.
The resignation of Sebastian Kurz (ÖVP) as Federal Chancellor is also an issue for Fitch. The rapid appointment of Alexander Schallenberg as Federal Chancellor reduced the likelihood of early elections, but the ongoing investigations by the public prosecutor’s office could increase tensions within the coalition. “Early elections would bring uncertainty about the composition of a future coalition government and could pose risks to the fiscal outlook and the implementation of the recently announced tax reform plan,” writes the rating agency.
Finance Minister Gernot Blümel (ÖVP) was pleased about the rating confirmation from Fitch. “With this rating, Austria’s budgetary course has been confirmed by the most important rating agencies this year,” said Blümel in a broadcast on Saturday. Against the background of the crisis and the associated rise in the debt ratio, this is “not a matter of course”.