Dagong downgrades Netherlands' credit rating outlook

BEIJING -- Dagong Global Credit Rating Co Ltd, China's domestic rating agency, announced on Friday it would downgrade the sovereign credit rating outlook of the Netherlands from stable to negative.

The agency said it would maintain the country's local and foreign currency sovereign credit ratings at AA+.

Fiscal austerity and accelerated decline of house prices put downward pressure on the Dutch economy, weakening its financial system and leading the government's debt repayment abilities to fall into a downward trend, said Dagong.

The agency forecast that the Dutch economy will decline by 1.3 percent in 2013 and 0.3 percent in 2014, given its shrinking private consumption and investment and weak external demand.

The continued economic recession will result in general government deficits of 3.3 percent in 2013 and 3 percent in 2014, and the general government debt ratio will rise to 73.5 percent in 2013 and 75.3 percent in 2014, said Dagong.

The agency said the main reasons for adjusting the outlook while maintaining the rating include the many competitive industries in the Netherlands, the country's higher labor productivity compared to the European Union average, and large current account surpluses.