Standard & Poor's (S&P) has revised down its outlook for Spain this Friday, changing the note from 'stable' to 'negative' due to the economic effects of the pandemic and for not having been able to approve budgets since 2018. However, it maintains the grade at 'A'.
"We estimate that, by 2020, the economy will contract by 11.3%, before recovering by 8.2% next year ", the rating agency pointed out in its latest report. In addition, it has pointed out that the national economy will not recover the levels of 2019 until 2022. Regarding the public deficit, it places it at 12% for this year. "The fiscal prospects for 2021 are very uncertain, given that a draft budget has not yet been submitted," they point out.
The experts of the US firm point out that "the resulting economic pressures on Spain may have increased the prospects for a political deal this fall for a 2021 budget, while building a consensus behind the growth-friendly reforms detailed in Spain's National Reform Program. "
MOODY'S MAINTAINS ITS PERSPECTIVE
This Friday Moody's has also pronounced on the 'rating' of Spain. In your case, has maintained the rating at 'Baa1' with a stable outlook. In his view, the economy "has been hit hard by the coronavirus pandemic, but government support measures, combined with previous advances to restore competitiveness and reduce macroeconomic imbalances, should allow for a strong economic recovery next year. ".
"The European Union (EU) recovery funds, of which Spain will be a great beneficiary, should help to strengthen the recovery in the coming years and could also help boost the long-term growth potential of the Spanish economy ", confirms this rating agency.
However, he believes that the fiscal and debt indicators "have been and probably will continue to be weaker than many of their peers." Therefore, he believes it is likely "that the public debt ratio will stabilize around 120% of GDP in the coming years, an unprecedented level for Spain." In addition, he has criticized "the complex political dynamics of Spain", which has hindered the advance of structural reforms in recent years.
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