By Lisa Beilfuss
Standard & Poor's Ratings Services on Friday raised its
outlook on the Netherlands to positive from stable, citing a
broadening economic recovery.
S&P affirmed the country's double-A-plus rating, which is
one step below triple-A.
The credit ratings firm said the positive outlook reflects a
one-in-three probability that it could raise its ratings on the
Netherlands within the next 24 months if economic growth prospects
improve further.
S&P said it expects the Dutch economy to expand by about
1.7% annually through 2017, up from 0.9% growth last year and more
than the firm predicted six months ago. The European Commission has
projected 1.6% growth this year and 1.7% growth next year.
The firming of the eurozone's growth prospects will continue to
support demand for Dutch goods and services, S&P said, adding
that demand from trading partners outside the eurozone should be
supported by euro depreciation.
S&P expects domestic demand to recover as a result of
increases in real disposable income--driven by the decline in oil
that has led to an improving job market and lower inflation.
Capital spending, supported by accommodative central-bank policy,
will rise and a recovering housing market will help lift
consumption, the firm said.
At the end of 2013, S&P stripped the Netherlands of its
triple-A rating, as consumer spending slid, in part a result of a
weak housing market, and dragged down economic growth.
Write to Lisa Beilfuss at l isa.beilfuss@wsj.com