<\/strong>\u201cThe Board […] shall maintain long run growth of the monetary and credit aggregates commensurate with the economy\u2019s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.\u201d<\/em><\/mark><\/p>\n\n\n\n
Looking at the 10-year government bond yield curves of the G4 (US, UK, euro area and Japan), these are the only ones that have managed to keep yields below where they started the year. This has been remarkably effective, allowing them to contain borrowing costs at more moderate levels. The pressure for short-term rates to come down will only reinforce this trend, helping governments secure financing at lower levels in the near term as well.<\/p>\n\n\n\n Recent political developments have reignited uncertainty about the fiscal debt burden, with rating agencies particularly active in the euro area\u2014upgrading Spain, Italy and Portugal, while Fitch downgraded France.<\/p>\n\n\n\n Fitch, Moody\u2019s and S&P raised Spain\u2019s rating<\/strong>, acknowledging the country\u2019s resilience. S&P highlights a decade of private-sector deleveraging that has improved the external balance, as well as strong growth prospects above the European average, supported by population growth (immigration), rising employment and robust domestic demand (forecasting GDP growth of +2.6% in 2025). It also notes Spain\u2019s limited exposure to US tariffs. On the other hand, S&P warns that \u201cpolitical deadlock constrains policy impetus. No budget has been passed since 2023, leaving fiscal adjustment modest despite strong economic growth.\u201d <\/p>\n\n\n\n Fitch upgraded PORTUGAL\u2019s rating from ‘A\u2013\u2019 to \u2018A\u2019<\/strong> with a stable outlook, underlining fiscal consolidation, a sharp reduction in debt and improvements in external metrics. Fitch noted that public debt fell from 134.1% of GDP in 2020 to 96.4% in the first quarter of 2025, while public finances remain solid with a projected surplus in 2025 (+0.1% of GDP) and small deficits in 2026\u20132027. On the external side, Portugal continues a steady process of deleveraging, while the economy has shown resilience. Fitch forecasts GDP growth of 1.8% in 2025 and 2.2% in 2026\u2014above the euro area average\u2014driven by consumption, tax cuts, and a lower interest rate environment, before slowing to 1.7% in 2027. <\/p>\n\n\n\n Fitch upgrades ITALY\u2019s rating to \u2018BBB+\u2019<\/strong> with a stable outlook. The agency highlighted the country\u2019s greater fiscal resilience. Fitch expects a continued gradual deficit reduction in 2025-2027, supported by structural improvements on the revenue side and strict expenditure control. It forecasts a deficit of 3.1% of GDP this year (versus the 3.3% official target). The authorities remain committed to spending restraint, aiming to bring down the deficit to 2.6% in 2027 and under 2% by 2029. Italy\u2019s debt fell by over 20 percentage points in 2020-2024. Debt will remain much higher than peers (the \u2018BBB\u2019 median was 57.3% in 2024), but reduced risks can be seen in terms of debt financing and sustainability.<\/p>\n\n\n\n Fitch downgraded France\u2019s long-term rating from \u2018AA\u2013\u2019 to \u2018A+\u2019<\/strong>. The outlook remains stable. This decision reflects the following drivers: 1) High and rising debt ratio: France\u2019s debt ratio for 2024 is now the third highest among countries in the \u2018A\u2019 and \u2018AA\u2019 rating categories. 2) Political fragmentation hinders consolidation: Fitch believes that it is unlikely that the deficit will be brought down to 3% by 2029. This includes a weak record of fiscal consolidation and compliance with EU fiscal rules. Fitch was the first credit rating agency to downgrade France within the \u2018A\u2019 category, and there is little doubt that other agencies will follow suit in the short to medium term for the same reasons cited by Fitch\u2014unless the country achieves a major political agreement that delivers clear and credible fiscal plans. Failing this, French public debt is expected to rise, with forecasts pointing to an increase of 10 percentage points by 2030, taking it to above 120%. The country\u2019s public debt will remain elevated and is far from the stabilisation threshold (5.5% projected for 2025 compared to the 2.8% required to stabilise the public debt level).<\/p>\n\n\n\n Date of report: October 6th 2025<\/sub><\/sub><\/p>\n","protected":false},"author":7,"featured_media":22135,"template":"","categories":[479,666],"class_list":["post-22053","quarterly-report","type-quarterly-report","status-publish","has-post-thumbnail","hentry","category-research-en","category-financial-analysis"],"acf":[],"_links":{"self":[{"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/quarterly-report\/22053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/quarterly-report"}],"about":[{"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/types\/quarterly-report"}],"author":[{"embeddable":true,"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/users\/7"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/media\/22135"}],"wp:attachment":[{"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/media?parent=22053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/creandgroup.com\/en\/wp-json\/wp\/v2\/categories?post=22053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/creandgroup.com\/wp-content\/uploads\/image-71.png\")
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