Confirms Spain’s ‘rating’ at ‘A-‘ with ‘stable’ outlook


The rating agency Fitch Ratings has revised its growth forecasts for the Spanish economy by three tenths upwards compared to the previous estimate in June, so Spain will grow by 2.2% this year, while it has improved by one tenth its estimates for 2024, up to 1.7%.

However, by 2025 it will rebound by three tenths from the previous year’s figures, up to 2%.

Then, regarding the more immediate growth, Fitch has assured that this has been supported by strong immigration and a solid recovery in tourism, among other factors. However, Fitch has predicted that economic activity will slow in the second half of 2023.

In addition, it has identified the political uncertainty after the July elections and the possibility of new elections as destabilizing factors that could delay the preparation of general State budgets in 2024.

In its general evaluation, Fitch has highlighted that among Spain’s strengths is the “firm downward path” of the public debt ratio and its potential for economic growth in the medium term thanks to European funds and structural reforms.

In this sense, Fitch forecasts that the gap between income and expenses of public accounts will be 3.9% this year, 3.1% in 2024, and 2.9% in 2025.

On the negative side, the high structural unemployment rate and low labor productivity persist, as well as concerns about the sustainability of the debt due to the increasing cost of financing.

Fitch has anticipated that Spanish public debt will be 110.6% this year, well above the 98.2% in 2019 and the 50.6% of other nations with a similar credit rating. In 2024 and 2025 it will barely vary after standing at 109.4% and 108.2%, respectively.

Likewise, the return of tensions between the Catalan Generalitat and the central government could exert “severe macroeconomic stress” that deteriorates the metrics of the Spanish sovereign rating.

In summary, Fitch has confirmed, for the moment, Spain’s ‘rating’ when issuing long-term debt both in euros and in foreign currency at ‘A-‘ with a ‘stable’ outlook.

Regarding inflation, the increase in the cost of living will close this year at 3.5% year-on-year to moderate in 2024 by six tenths, to 2.9%, and another eight in 2025, when it would be 2.1%, very close to the price stability objective defined by the European Central Bank (ECB).