S&P raises Spain's rating for its economic solidity
The S&P Debt Rating Agency (Standard & Poor's) has raised the solvency of Spanish debt, providing it with a more positive rating, with a more stable outlook than it previously had. This is because in Spain the economy continues to grow at a faster rate, above the European average.
Promising future
In this way, the level of public debt is reduced and progress is made in fiscal consolidation. In fact, this report has highlighted it as the greatest growth of the Spanish economy compared to the euro zone, with the possibility of maintaining this difference for the next three years.
This report highlights the resilience of the Spanish economy, despite the prolonged political stagnation and slowdown in the euro zone that has been experienced. In fact, this publication ensures that Spain is better positioned to face external risks such as Brexit, global trade contracts or European economic weakness.
Regarding the next general elections of 10-N, according to this report, it is likely that the Government will not obtain a parliamentary majority and this will make it difficult for measures to be adopted, such as a new labor reform that will combat the high rate of passage or face structural budget problems, such as the Social Security deficit.
According to S&P, public debt will decrease below 83% of GDP in 2022 and the Spanish economy is expected to continue growing above the Spanish average during 2019 and 2020.
According to the government, GDP will grow by 2.2% this year and the Minister of Economy and Business, Nadia Calviño, warned of the possibility that the current slowdown will be more intense this fall due to the influence of various international circumstances, such as the trade and technological war that exist between China and the United States.
S&P warns the Spanish Government that the considerable increase in the Minimum Interprofessional Wage by 22.3% could reduce the hiring path, referring to the fact that more reforms are needed that benefit the company, so that the unemployment rate stops rising. . A change towards more stable jobs could benefit consumption, competitiveness, productivity...
Another rating agency, in this case the Canadian DBRS, has confirmed the S&P information and has improved the future forecast, seeing a more stable outlook thanks to the strength and diversification of the Spanish economy, since it has a foreign sector. competitive and a stable improvement of public finances.
In fact, this agency believes that the debt/GDP ratio will continue to decline over the coming years through primary surpluses, economic growth and low interest rates.
