IRISH INSTITUTE OF CREDIT MANAGEMENT    
IICM RSS Feeds

The Irish Institute of Credit Management News Details


Spain's credit rating - 10-Dec-2009

Spain's credit rating is cut to negative

The outlook for Spain's government finances has been cut to negative by rating agency Standard and Poor's, because of lagging growth and a lack of aggressive efforts to control budget deficits. The analysts' group said the change from stable to negative stemmed "from our expectation of significantly lower GDP growth and persistently high fiscal deficits relative to peers."
The agency said there was also an "absence of more aggressive fiscal consolidation efforts and a stronger policy focus on enhancing medium-term growth prospects."
Standard and Poor's said it was maintaining its 'AA+' long-term and 'A-1+' short-term sovereign credit ratings for Spain. The company downgraded Spain from AAA to AA+ in January.
"Compared to its rated peers, we believe that Spain faces a prolonged period of below-par economic performance, with trend GDP growth below 1 percent annually, due to high private sector indebtedness (177 percent of GDP in 2009) and an inflexible labor market," Standard&Poor said on its Web site.
The agency said negative outlook also reflected the risk of a downgrade within the next two years "in the absence of more aggressive actions by the authorities to tackle fiscal and external imbalances."
It added however that Spain still had time to make adjustments. (c) Reuters
Disclaimer   © COPYRIGHT The Irish Institute of Credit Management, 2009