The international ratings agency Moody's on Thursday issued a credit update of Germany, maintaining its top "Aaa" rating, albeit with a negative outlook, a day after rumours over a possible German downgrade had rocked European stock markets. The agency emphasised, however, that its annual credit report on Germany "is an annual update to the markets and does not constitute a rating action." The rating of Europe's top economy, which has fared much better than its eurozone neighbours in the long-running crisis, was "underpinned (its) advanced, diversified and highly competitive economy and its track record of stability-oriented macroeconomic policies," Moody's said in a statement. Moreover, Germany enjoyed "high levels of investor confidence, which is reflected in very low debt funding costs." High productivity growth, wage moderation and strong global demand for German products "have allowed the country to establish a broad economic base, the resiliency of which is supported by its current account surplus," it continued. Germany had also made "significant" progress in terms of fiscal consolidation, recording a budget surplus in 2012 for the first time since 2007. "Moreover, Moody's expects it to record balanced budgets that compare it favourably to its Aaa and Aa-rated peers going forward," the statement said. While Germany has managed to avoid the recession into which many of its eurozone partners have been plunged, economic growth slowed to just 0.7 percent in 2012 from 3.0 percent the previous year. Moody's said it expected growth "to slow further to 0.4 percent in 2013 due to a lower net export contribution in light of the weak euro area outlook and rising imports, and only a moderate recovery in investment growth." However, this would be partially offset by robust private consumption backed by strong employment figures. And Germany could clock up growth of around 1.5 percent in 2014, the agency predicted. Moody's said its negative outlook on Germany's sovereign rating "primarily reflects the uncertainty associated with the impact of the ongoing euro area debt crisis, specifically the risks to Germany and the wider euro area stemming from a potential exit of a member country."