Fitch affirmed Germany's credit rating but warned!

International credit rating agency Fitch Ratings reported that it confirmed Germany's credit rating.

In a statement, the credit rating agency stated that Germany's long-term foreign currency credit rating was confirmed as "AAA" and the outlook for the rating was determined as "stable".

Germany's credit rating is 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, Germany faces structural challenges that negatively impact its growth prospects, the statement noted, adding that the coalition that came to power in May will allow a significant increase in infrastructure and defense spending to address ongoing growth problems.

The statement said the government is projecting additional borrowing of nearly 850 billion euros over the next five years to finance these programs, which will lead to an increase in deficits and debt.

The statement emphasized that the support package and social measures announced in the coalition agreement will also put pressure on the budget deficit, and that the government has pledged to offset some of the increase in spending with savings in the medium term, but there are limited details about these measures.

The statement stated that growth is projected to be 0.1 percent in 2025 due to uncertainty about U.S. tariffs putting pressure on economic sentiment, and that increased public spending will help growth rise to an average of 1.1 percent in 2026-2027.