THE HAGUE, Nov 30: The Netherlands on Friday dropped out of the exclusive club of “AAA” rated countries after Standard & Poor’s agency downgraded it to “AA+”, citing weakening growth prospects.

The surprising downgrade leaves only three remaining countries in the 17-nation eurozone with the coveted top rating from all three of the world’s major agencies.

S&P meanwhile upped Cyprus’ long-term rating to a B- and improved Spain’s BBB- rating from a negative outlook to stable.

“The downgrade reflects our opinion that the Netherlands’ growth prospects are now weaker than we had previously anticipated,” S&P wrote in a statement.

The “real GDP (gross domestic product) per capita trend growth rate is persistently lower than that of peers in similarly high levels of economic development.”

The long-term outlook for the Netherlands, the eurozone’s fifth-largest economy, was stable.

The world’s two other major ratings agencies, Fitch and Moody’s have so far maintained the lowland country’s rating at AAA.

Earlier this month the Dutch central statistics office (CBS) said the economy slowly moved out of recession in the third quarter with growth of 0.1 per cent.

However, year-on-year the Dutch economy shrank by 0.6pc, the CBS added.

Explaining the downgrade, S&P specifically pointed to a drop in consumer spending, dampened by high household debt levels and falling property prices.

Quoting Dutch Central Bank (DNB) figures, S&P said that 16.0pc of all Dutch households in a country of 16.7 million people have mortgage debts higher than the values of their properties.

The statistics office said in March that real disposable income last year for households in the Netherlands has fallen for the fifth year in a row, the longest run since 1982.

“We do not anticipate that the real economic output will surpass 2008 levels before 2017,” S&P added. But despite the less promising economic prospects, “the policy consensus in favour of containing public debt and deficits will be maintained,” the agency said.

The Netherlands in September unveiled its 2014 budget, which includes 6.0 billion euros ($8.0bn) in cuts, but the government encountered stiff opposition before getting it passed.

“Generally, reduced government spending has weighed on growth,” S&P said.

Eurogroup finance chief and Dutch Finance Minister Jeroen Dijsselbloem said he did not expect the downgrade to have an effect on interest the Netherlands paid on its debts.—AFP