We project annual real GDP growth in Spain to average 2.4% over our forecast horizon of 2016-2019. We expect Spain's general government budgetary deficit to narrow only slowly to 4.6% of GDP in 2016, from last year's wide 5.1% of GDP, despite strong economic performance. We are affirming our 'BBB+/A-2' ratings on Spain. The stable outlook balances our expectations of Spain's continued economic recovery against the risks posed by Spain's high net external liabilities and budgetary imbalances amid political uncertainty. On Sept. 30, 2016, S&P Global Ratings affirmed its 'BBB+' long-term and 'A-2' short-term foreign and local currency sovereign credit ratings on the Kingdom of Spain. The outlook is stable. Our 'BBB+' long-term rating on Spain reflects our view of
