November 19, 2019 / 12:34 PM / 6 months ago

Fitch: Club of AAA rated nations could grow for first time in nearly a decade

LONDON, Nov 19 (Reuters) - Ratings agency Fitch said on Tuesday it expected the number of countries holdings its coveted top notch ‘AAA’ rating could expand for the first time in nearly a decade in 2020, with both Austria and Finland in line for a possible upgrade.

The two AA+ rated sovereigns have been on ‘Positive Outlook’ since 2018, Fitch said in its latest report.

“They would be the first Fitch-rated sovereigns to regain their ‘AAA’ ratings,” the agency added.

Around the globe, 75% of sovereign rating outlooks were stable, the firm added, though pointed to regional differences where Latin America accounted for a “disproportionate share of negative outlooks”.

A number of countries in the region have suffered a tumultuous year with Venezuela tumbling deeper into its economic crisis and Argentina looking in line for another debt overhaul.

“The Middle East and Africa has more Negative than Positive Outlooks, but by a smaller margin than at any time since 2014,” the report found.

Fitch also predicted governments could deliver more fiscal and monetary stimulus into the system to counter a slowing world economy, but would not be able to fully counter the fallout from the trade war.

“In addition to directional changes in debt, ratings could be affected by the degree to which sovereigns have - and draw upon - fiscal space,” it added. (Reporting by Karin Strohecker; Editing by Tom Arnold)

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