The rating agency Fitch has upgraded the rating outlook for Austria from ‘negative’ to ‘stable’ – so there are no signs of a rating change in the near future. Austria’s credit rating for long-term foreign currency bonds is confirmed unchanged with the second best possible rating “AA+”. The reason for the improved outlook is that risks to the energy supply have diminished.
Austria is one of the few EU countries still importing significant volumes of Russian pipeline gas, which averaged nearly 60 percent of monthly imports in the first half of the year. While these supplies could be canceled if the transit contract between Ukraine and Gazprom is not renewed beyond 2024, such a situation should be manageable as Austria has secured access to non-Russian gas. The reason for the improved outlook would be.
Fitch also points out that Austria’s gas storage facilities, including the government’s strategic reserves, are 92 percent full.
OMV has taken important steps in the field of gas supplies
Austria’s largest public utility, OMV, has also taken important steps to diversify its gas resources in the medium and long term. OMV has booked additional pipeline capacity through 2026 and again through 2028 for 45 percent and 22 percent of annual consumption, respectively. In July, OMV announced the discovery of a domestic gas supply that could boost low annual domestic production by 50 percent from 2024. It also signed a ten-year LNG contract with BP, which will secure 16.5 percent of annual consumption from 2026. In the long term, large investments in Romania could generate additional gas supplies.
The long-term take-or-pay contract between OMV and Gazprom, which runs until 2040, is seen as an element of uncertainty. However, the Fitch experts now consider it less likely that domestic or international political pressure could lead to an early termination of the contract.
Fitch expects Austria’s budget deficit to fall from 3.2 percent in 2022 to 3.0 percent this year and to 1.5 percent in 2024. Government debt is expected to fall to 76.6 percent of GDP by the end of 2023 and will remain fall to 73.4 percent by 2025. , according to the estimate.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
