Luxembourg keeps Moody's AAA rating

(CS) Luxembourg's AAA rating with a stable outlook by credit rating agency Moody's remained unchanged following an annual update of four credit assessment factors.

The Grand Duchy currently also holds triple A ratings from Fitch and Standard & Poor's (S&P).

Luxembourg is one of only nine countries worldwide to hold a AAA rating by all three major credit rating agencies. The others include Australia, Canada, Denmark, Germany, Norway, Singapore, Sweden and Switzerland.

The research published Monday by Moody's was not a rating action, but rather an update of ratings factors, which include economic, institutional and fiscal strength, and susceptibility to risk.

In its report, Moody's commented on good growth prospects, while also warning of the country's reliance on the financial sector, a point previously criticised, also by the other credit rating agencies. With a number of regulatory and tax changes underway, the financial sector could be a source of vulnerability, Moody's said.

Praise for Luxembourg meanwhile included the open and innovative character of its economy, its good budget track record and sound supervision of the financial sector.

Moody's however also voiced some concern over the long-term financing of the pension system. Here, too, it echoed the assessment by Fitch and S&P.

Finance Minister Pierre Gramegna welcomed the report, saying it was in line with Luxembourg's good ranking in the recently released World Competitiveness Yearbook. Unemployment has been decreasing, Gramegna added, concluding: “This proves that government policy looking to diversify our economy and our financial centre and to consolidate our public finances while maintaining a high level of investment is paying off.”