KBRA Affirms AAA / K1+ Ratings for the Federal Republic of Germany; Outlook Stable
15 Mar 2024 | Dublin
KBRA Europe (KBRA) affirms the Federal Republic of Germany’s long term-issuer ratings of AAA. KBRA also affirms the short-term ratings of K1+. The Outlook on the long-term ratings is Stable.
| This credit rating is an unsolicited credit rating | |
|---|---|
| With Rated Entity or Related Third-Party Participation | Yes |
| With Access to Internal Documents | No |
| With Access to Management | Yes |
KBRA’s affirmation of the ratings reflects Germany’s large, diversified and globally important economy, high degree of economic resiliency, strong governance and institutional framework, prudent policy environment, and healthy public finance position. Germany’s considerable fiscal capacity and high degree of financial flexibility allow the government to respond to external shocks. Germany currently finds itself in a recession and faces tough economic headwinds, which KBRA views as short-term. Public debt, relative to its recent past, will likely remain elevated over the short-term. Germany’s benchmark status and aforementioned financing flexibility significantly minimise credit risks. Germany has extremely strong access to liquidity, in KBRA's view. The Stable Outlook considers risks around energy supply, inflation, monetary policy, and their impact on economic growth and the public finances. KBRA acknowledges that conflict in the Red Sea adds somewhat to dampened performance, however Germany is not overly exposed.
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