Standard & Poor's lowered its credit rating for the Netherlands to AA plus from AAA on Friday, while lifting its outlook for the struggling economies of Spain and Cyprus.
Moritz Kraemer, chief sovereign ratings officer at S&P, told CNBC that the Netherlands' downgrade by the S&P ratings committee was triggered by the country's weak economic growth prospects.
"We see that both in recent history and in our projections, that the economic dynamism of the Dutch economy will lag behind what we would usually expect for sovereign economies at that level of development and prosperity," he told CNBC on Friday. "So this has been the immediate trigger for the ratings decision."
(Read more: 'Abysmal' Dutch economy threatens euro zone recovery)
The agency's report said it expects the country's gross domestic product (GDP) to contract by 1.2 percent in 2013, before growing by 0.5 percent in 2014 and slowly accelerating to 1.5 percent by 2016. It argued that real economic output for the country will not surpass 2008 levels before 2017.
The cut means the only euro zone countries to retain their AAA rating at S&P are Finland, Germany and Luxembourg.
However, Kraemer stressed that the Netherlands' new rating of AA plus was the second-highest on a scale of 21. He also noted that the agency's stable outlook for the country was worth bearing in mind.
"We think the policy consensus is strong enough to bring the needed adjustments on the fiscal side, on the budgetary side, and that is reflected in our stable outlook that we have assigned at the same time," he told CNBC. "And remember that the outlook on the formerly AAA rating of the Netherlands had been on a negative outlook for almost two years."
(Read more: Dutch Fin Min Dijsselbloem: I take S&P downgrade seriously)
S&P's downgrade follows Detusche Bank's warning in August that the "abysmal" Dutch economy threatened the euro zone recovery. The bank's analysts said in a note that: "The Netherlands is more akin to a 'peripheral', with dramatically rising unemployment, spiking business failures and economic confidence detaching from the AAA peer group and moving to crisis country levels."
The European Commission estimates that unemployment in the country will reach eight percent in 2014, compared to less than four percent in 2009.
(Read more: Debt-crippled Dutch wake up to housing crash)
Cyprus rating raised; Spain outlook stable
S&P also raised its credit rating for Cyprus to B-/B from CCC plus/C, arguing that the immediate risks to Cyprus' austerity program had receded.
It said it was confident that the Cypriot government - having successfully completed the first two reviews of its austerity program - would continue to comply with the program on time.
Cyprus and its international lenders reached a last-minute rescue deal to resolve the country's financial crisis back in May, which included a levy on uninsured deposits over 100,000 euros ($136,000) in the Popular Bank of Cyprus.
(Read more: Can the Netherlands keep its triple-A rating?)
S&P also positively revised its credit ratings outlook for Spain - to stable from negative - stating that the country's external position was improving as growth gradually resumed.
Speaking to CNBC, Kraemer said that there were promising signs that the Spanish economy was finally beginning to turn a corner.
"What we're seeing in Spain is two developments which we consider both stabilizing. One is that the Spanish economy has made some notable progress in the re-balancing of its external deficits," Kraemer said. "We actually forecast for this year of a current account surplus which would be the first one since 1986."
He added: "We also think that the economy is bottoming out; that the long, drawn-out and deep recession is coming to an end. We see moderate growth in the coming year and in 2015. But even with a growth rate somewhere just over 1 or 1.5 percent, that would be the highest growth rate that Spain has recorded since 2007."
Despite revising its outlook for Spain, S&P maintained its rating at BBB-/A-3.
The news follows data from Spain that indicates the country's economy is at last improving. Spain's GDP grew by 0.1 percent in the third quarter, data released by the country's statistics agency showed at the end of October. However, S&P did warn about the country's generally low economic growth prospects over 2013-2016.
Former Spanish Prime Minister Jose Luis Rodriguez Zapatero told CNBC recently that he felt the Spanish economy was finally rebounding, and that country's society had made a tremendous effort and huge sacrifices to implement the reforms necessary.
Surprise move?
Wolfango Piccoli, managing director at Teneo Intelligence, told CNBC that Cyprus' upgrade was the surprise move, while the changes to S&P's outlook for Spain and the Netherlands were less shocking.
"The Netherlands' economic fundamentals remain strong, but the growing populist tone in Dutch politics will continue to cause headaches for the government," Piccoli said.
"Prime Minister Mark Rutte's coalition is already lacking a majority in the Upper House. With local and European elections coming up next year, and Geert Wilders and the Socialist Party doing well in the polls, passing further reforms is unlikely to become easier in 2014."
Talking to CNBC about whether the ratings updates from S&P would have an effect on the bond markets, Don Smith, a government bond strategist ICAP, said: "We've seen many instances where downgrades have little or zero impact on bond markets sentiment. My gut feeling here is that this is probably one of those instances. The impact on these markets, especially at this time of year, when markets are so quiet is likely to be very, very small."