Western Europe's Sovereigns Follow Diverging Paths

Dow Jones01:55

1355 ET - Even as growth in Western Europe has been broadly resilient, sovereign fiscal stances and debt trajectories are diverging, Fitch Ratings says. Most sovereigns this year have experienced expenditure pressures driven primarily by energy subsidies, higher defense spending, higher interest costs and demographic-related expenditure, according to Fitch. Six euro zone sovereigns, including France, Italy and Spain, are expected to have debt ratios above 90% of GDP by the end of 2028, Fitch says, adding about half will see debt levels below 60%. Debt ratios are expected to rise in 12 euro zone sovereigns in 2026-2028, Fitch says, including in France and Germany. Debt ratios are expected to be stable or fall in nine. Fitch also says government debt-to-GDP dynamics remain the primary ratings driver.

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