S&P affirms Germany's AAA rating

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Standard & Poor's affirmed its AAA long-term and A-1+ short-term credit ratings for Germany on Friday.

"Germany has a highly diversified and competitive economy with a demonstrated ability to absorb large economic and financial shocks," the ratings agency said in a release.

The stable outlook and top-tier rating reflect S&P's belief that Germany's solid public finances and "strong external balance sheet" will be able to withstand future economic and financial shocks.

Germany's 2015 gross domestic product is expected to grow 1.1 percent. In terms of per capita, this forecast translates into real GDP growth averaging 1 percent over 2014 and 2015. The country's GDP was forecast to have expanded by 1.4 percent in 2014, up from 0.1 percent real GDP growth in 2013.

Germany's economy, driven by high net exports, is relatively competitive thanks to years of corporate restructuring, wage restraints and high savings rates, S&P said. This has allowed Germany to foster trade and current account surpluses, leading to its position as a net external creditor. S&P said it does not consider Germany's private or public sector balance sheets to be under any material strain.

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Germany will be able to lower sovereign borrowing costs in the medium term because it benefits from low interest rates, according to S&P.

"Unlike most other highly rated peers, Germany has avoided the need for significant private sector deleveraging and fiscal consolidation as it did not rely on higher borrowing during the boom years," S&P said.

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