Fitch Maintains Austria's Rating, Stable Outlook on 'Diversified' Economy, 'Sound' External Finances

12:23 AM EST, 12/08/2025 (MT Newswires) -- Fitch confirmed its long-term foreign-currency issuer default rating of AA for Austria, with a stable outlook. The affirmation is based on Austria's "diversified" economy, "sound" external finances, in-line governance indicators, and the euro's reserve currency status, according to a Dec. 5 release. On the other hand, the rating is constrained by a growing government debt ratio and low medium-term growth potential stemming from weakened cost competitiveness. Fitch also noted structural fiscal challenges, primarily rising social, healthcare, and education spending, amid ageing demographics and insufficient structural reforms. The rating agency noted Austria's slow recovery after two years of recession, with real gross domestic product growth estimated at 0.3% for 2025, 1% for 2026, and 1.5% for 2027. Lower inflation is expected to support real wage growth, which could lead to some unwinding of household savings. Concurrently, an incremental recovery in business sentiment across the construction and manufacturing sectors is anticipated to boost investment growth, Fitch said.