Moody’s predicts a ‘slow and costly process’ for Valencia, the ‘weakest budgetary situation in Spain’

The risk rating agency Moody’s estimates that the economic impact of DANA, which will affect both the public and private sectors, will weigh on the accounts of autonomous communities and municipalities, since it will hamper collection and increase the need for social assistance.

“Economic recovery in affected regions will be a slow and costly process“, warns Moody’s in a report published this Friday and collected by EFEin which he emphasizes that the economic impact of the disaster, particularly intense in Valencia, is still uncertain.

In this province, 4,500 businesses have been affected – “half of which are at risk of closing” -, at least 53,000 hectares of crops are damaged and insurance losses will exceed 3.5 billion euros, according to initial data, underlines he.

Valencia currently has the weakest budgetary situation in Spainadds Moody’s, which expects further deterioration in the coming months due to both the economic slowdown in affected areas such as higher social spendingwhich will lead the region to resort to state liquidity mechanisms.

This leaves Valencia with very limited capacity to take on new infrastructure spending obligations, such as the recovery plan needed to repair damage or a program to prevent future disasters.

The agency also analyzes the aid approved so far and concludes that, although the package of measures approved by the government will help cover recovery costs, the scale of the disaster in terms of infrastructure and activity economic will affect the rating of the affected regions, in particular Valencia.