Research Update: Spain 'A/A-1' Ratings Affirmed; Outlook Stable

Despite political uncertainty, Spain's competitive, service-driven economy should post growth rates above the eurozone average over 2023 and 2024, benefiting from EU inflows and net immigration. We project gradual budgetary consolidation between 2023 and 2026, although the indexation of pension expenditure to inflation will still drag on fiscal performance, inhibiting general government debt reduction. The public sector (including the Banco de Espana) is the primary external debtor in the Spanish economy, with a net external liability estimated at €734 billion (52% of GDP) as of March 31, 2023. We affirmed our 'A/A-1' unsolicited sovereign credit ratings on Spain. The outlook is stable. On Sept. 15, 2023, S&P Global Ratings affirmed its 'A/A-1' long- and short-term, foreign- and local-currency, unsolicited sovereign

...- Despite political uncertainty, Spain's competitive, service-driven economy should post growth rates above the eurozone average over 2023 and 2024, benefiting from EU inflows and net immigration. - We project gradual budgetary consolidation between 2023 and 2026, although the indexation of pension expenditure to inflation will still drag on fiscal performance, inhibiting general government debt reduction. - The public sector (including the Banco de Espana) is the primary external debtor in the Spanish economy, with a net external liability estimated at 734 billion (52% of GDP) as of March 31, 2023. - We affirmed our 'A/A-1' unsolicited sovereign credit ratings on Spain. The outlook is stable....

Research Update