27 March, 2018

By VIVA Team

Two of the big three credit ratings agencies now view Spain's economy as A-, which is a huge improvement on recent years.

Two of the big three credit ratings agencies now view Spain’s economy as A-, which is a huge improvement on recent years.

International credit ratings agency Standard & Poor’s (S&P) has raised Spain’s credit rating on its latest S&P Global Ratings to A-, the highest level the country has experienced for six years…


This improvement is predicated on the notion that Spain’s economic growth is widely expected to outpace that of the eurozone area in 2018, while the government’s budget deficit – which has been a heavy burden for many years – is poised to shrink markedly this year.

According to a statement issued by S&P last week, Spain’s rating was raised “in view of the country’s continuously strong economic performance, accompanied by a solid current account surplus and ongoing budgetary consolidation”.

While an A- ranking means that Spain still has six positions to rise before its economy can be considered to be truly purring, it represents a marked improvement on 2012 when the nation’s property crash sent the country’s banking sector into a tailspin that was only arrested following an EU-backed bailout.

Since then, however, Spain’s economy has enjoyed 18 consecutive quarters of growth, with the Bank of Spain now equally as bullish as S&P in forecasting uninterrupted growth through to until at least 2022.

Prior to the increase, S&P rated Spain’s economy BBB+, which sounds OK but actually comes with considerable baggage that can make it difficult for the government to borrow money. S&P is confident that Spain can further improve its score over the next couple of years “if the government achieves greater consolidation of public finances than we currently expect” and further improvement in easing political tensions is observed, the agency said.

Earlier this year, another global ratings agency Fitch already upped Spain’s rating to A-, while Moody’s – the third of the big three agencies – is expected to follow suit when it publishes its market updates in mid-April.