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Moody’s improves rating outlook for Czechia

The rating agency appraises risk mitigation regarding natural gas, debt and pensions, awards “stable” outlook for the Aa3 rating

In a recent press release, the rating agency Moody’s has improved Czechia’s rating outlook from “negative” to “stable”. The measure expresses the agency’s opinion regarding the likely direction of the rating over the medium term. This means that Moody’s expects the Czechia to hold onto the Aa3 rating in the foreseeable future.

In the document, the agency reasons with structural improvements to the economy in the last year. The press release appraises the country becoming independent on Russian natural gas as well as consuming less of this commodity overall. The fiscal consolidation that stabilises the debt burden was also seen positively, as was the planned pension reform, which would introduce changes in valorisation and retirement age regulation.

The stable outlook can act as a reassurance for investors that the Aa3 rating is expected to stay unchanged. Moody's long-term obligation rating at this level reflects Czechia’s strongpoints, such as quality institutions, low exposition to geopolitical risks, good availability of credit or relatively low public debt.

Prepared by the Czech Trade United Kingdom & Ireland team