S&P Upgrades SpainS Credit Rating to ‘A’-First Increase in Six Years
MADRID – S&P Global Ratings raised Spain‘s sovereign credit rating to ‘A’ from ‘A-‘ on September 25, 2023, marking the first upgrade in six years. The move reflects S&P’s assessment of Spain’s improved economic outlook,fiscal performance,and reduced risks stemming from the banking sector and the COVID-19 pandemic.
The upgrade signals increased investor confidence in Spain’s economic stability and its ability to manage its debt. This is notably significant as Spain,like many European nations,navigates a period of heightened economic uncertainty driven by geopolitical tensions and rising interest rates. The improved rating could translate to lower borrowing costs for the Spanish government and businesses, potentially stimulating further economic growth and investment.
S&P cited Spain’s strong economic recovery in 2023, supported by robust tourism and domestic demand, as a key factor in its decision. The agency projects Spain’s economy will grow by 1.6% in 2024 and 1.7% in 2025. Furthermore,S&P acknowledged the Spanish government’s commitment to fiscal consolidation and its progress in implementing reforms tied to European Union recovery funds.
“We believe that Spain’s economic growth will continue to be supported by the ongoing implementation of the Recovery and Resilience Plan,” S&P stated in its report. “The plan is expected to boost investment and productivity, and to help Spain transition to a more sustainable and digital economy.”
Spain’s previous credit rating upgrade occurred in 2019, when S&P raised it from ‘BBB+’ to ‘A-‘. The country was downgraded during the Eurozone debt crisis in the early 2010s. The current upgrade underscores the substantial progress Spain has made in strengthening its economy and public finances since then.
