KBRA Affirms AAA / K1+ Ratings for the Federal Republic of Germany; Outlook Stable
15 Sep 2023 | 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 faces challenges over the near-term horizon, particularly with regard to energy supply and its impact on industry. The high cost of living reduces disposable income, while inflation erodes savings and as such, weighs on economic activity. Growth could suffer as the economy faces 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. The Stable Outlook considers risks around energy supply, inflation, tightening monetary policy and their impact on economic growth and public finances.
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