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UPDATE 1-S&P raises Austria outlook on resilience to euro crisis
January 29, 2013 / 1:42 PM / in 5 years

UPDATE 1-S&P raises Austria outlook on resilience to euro crisis

* Raises Austria outlook to stable from negative

* Cites economic resilience

* Affirms AA+/A-1+ sovereign credit ratings

VIENNA, Jan 29 (Reuters) - Ratings agency Standard & Poor’s raised its outlook on Austria’s debt to stable from negative on Tuesday in a rare mark of approval for a euro zone country after three years of crisis in the bloc.

Austria’s export-led economy has weathered the debt storm better than most European countries and unemployment remains the lowest in the euro zone. Its gross domestic product is expected to grow 0.5-1.1 percent next year.

“The stable outlook factors in our expectations that Austria’s economy will continue to resist the negative impact of the European sovereign debt crisis, the government will adhere to its stricter consolidation path and reforms, and Austrian banks will improve their capital,” S&P said in a statement.

S&P affirmed its AA+ sovereign credit rating. The other two major rating agencies, Fitch and Moody‘s, still give Austria the top triple-A rating.

Ratings agencies have also been concerned about the high exposure of Austrian banks to central, eastern and southeastern Europe, where together with Italy’s UniCredit they are the leading lenders.

S&P stripped Austria of its triple-A a year ago, citing the exposure of its banks - which include Raiffeisen and Erste Group - to weaker euro zone debtor countries and to Hungary, as well as to wider euro zone troubles.

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