The Spanish economy is going through a soft patch and the rating agencies are taking notice. Moody’s has just upgraded the rating of Spanish debt to A3, a decision which confirms the first increase in our country’s rating in 5 years. The last one to do so was S&P, in 2019, and today it accompanies Moody’s with an improvement, not of the final rating, but of the outlook of the rating, leaving it “positive”. Our country’s GDP growth leads that of the main economies in the eurozone, with a quarterly increase of 0.8% between April and June, exceeding the 0.5% that the OECD average maintains. For months, Spain has positioned itself as the engine of Europe, after a 2023 that was also very positive compared to comparables.
Already in February, the American bank Citi had intoned the mea culpa and acknowledged having been wrong in its forecasts for the countries of the European periphery, perceiving Spain as one of the main drivers of the eurozone for the future. Citi highlighted how Spain was leading the growth of the region and predicted a year 2024 in which our country would repeat itself as the economy with the strongest growth among the main countries of the eurozone.
The reasons given by the American bank were the increase in employment and productivity, as well as the rebound in exports, not only of tourist services, but also of goods.
In addition to Citi, the major credit rating agencies have been closely monitoring the development of the Spanish economy for months, with their finger on the button to increase their ratings. In March, Moody’s improved the outlook for our country’s debt rating: it left it at “positive”, anticipating a future increase in the rating if the evolution continued to be good.. This is how it happened: the forecasts of institutions such as the Bank of Spain indicate 2.3% for this year, while the consensus of independent analysts, including Bloomberg Its expectations are even higher, reaching 2.6%. These are figures well above those published by Moody’s in March, of 1.7% for this year, at a time when the outlook for Spain’s rating was improving.
With everything in its favor, the American agency finally confirmed this Friday the first improvement in our country’s rating since 2019 (that year, S&P raised the rating of Spanish debt, up to HAS). Today, Moody’s raised the rating to A3four levels above junk rating and one below S&P rating.
S&P upgrades outlook
Standard and Poor’s has also revised the rating of Spanish debt and, although this does not improve the rating of our country (it is still a HAS), the outlook has improved, the indicator that measures the direction the agency is taking for future reviews. Now Spain now has a “positive” outlook, from “stable” for S&PTherefore, if the Spanish economy remains healthy in recent months, it would not be surprising if the agency improves the rating in future assessments.
