Moody's raised the credit rating outlook for the Netherlands and Belgium to stable from negative, on Friday.
The rating agency raised the Dutch rating outlook to stable and affirmed the country's AAA rating.
The rating outlook was raised as the Dutch government balance sheet is unlikely to be affected by additional support to other euro area countries such as Italy and Spain, the agency noted. Moody's also see a reduction in contagion risks in the wider euro area.
Further, the domestic vulnerabilities of the Netherlands' such as weak growth outlook, high household debt and falling house prices, have apparently peaked and are expected to return to positive territory. Moody's also expect the Dutch debt-to-GDP ratio to peak in 2015, suggesting stabilization of the fiscal strength.
The top-notch rating was affirmed citing the country's advanced, highly competitive and diversified economy, which underpins the country's economic resiliency. A very high debt affordability and a strong track-record of debt reduction also support the rating, the firm said.
Moody's affirmed Belgium's rating outlook to stable and affirmed the Aa3 rating. The reasons behind the outlook upgrade include diminished risks that Belgium's government balance sheet will be affected by a further crystallization of contingent liabilities from the banking sector.
The agency expects Belgium's fiscal consolidation to continue and support a reversal in government debt at around 100 percent of GDP in 2014-15.
The country's rating was affirmed citing the robustness of its economy with limited external imbalances backed by strong institutions; and still high government debt, which is expected to diminish only gradually over the medium term.
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