International credit rating agency Fitch Ratings has announced the confirmation of the credit ratings of Germany and the UK. The long-term foreign currency credit rating of Germany has been affirmed as “AAA” with a “stable” outlook. The statement highlighted Germany’s credit rating as supported by its high per capita income, large and diversified economy, strong institutional framework, high current account surplus, and positive net international investment position. Despite its strengths, the statement indicated some structural challenges affecting Germany’s growth expectations negatively, mentioning that the country’s post-pandemic economic performance continues to remain weak due to external shocks and structural factors. Due to uncertainties related to elections and potential US tariffs putting pressure on economic sentiment, it is expected that the German economy will show modest growth of 0.3% in 2025.

EXPECTATION TO INCREASE TO 1%: The statement by the agency mentioned that with the reduction of these uncertainties and the implementation of measures supporting growth by the new government, economic growth is expected to rise to 1% in 2026. In another statement by Fitch, the long-term foreign currency credit rating of the UK has been confirmed as “AA-” with a “stable” outlook. The statement conveyed that the UK’s rating reflects a high-income, large, diversified, and flexible economy, a reliable macroeconomic policy framework, deep capital markets, and the international reserve currency status of the pound providing ample financing flexibility. The growth forecast for this year for the UK has been revised down from 1.5% to 1.2%, attributed to lower-than-expected activities due to low consumer and business confidence, a decline in net exports, and a cooling labor market. The statement noted that with the impact of monetary easing and some recovery in investments, the UK economy is projected to grow by 1.7% in 2026.