This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Resilient economic growth despite political fragmentation Slow government debt reduction amid continuing external deleveraging -- Spain?s minority coalition is under increasing pressure as the 2025 budget vote approaches. -- Spain?s elevated government debt-to-GDP ratio will decline only slightly over the next few years, reflecting an unhurried approach to budgetary consolidation. -- Political gridlock could prevent the implementation of fiscal and structural reforms, including those required to receive the 70% share of remaining Next Generation EU (NGEU) Funds. -- Current account surpluses, supported by robust tourism receipts and other service exports, combined with an accelerated execution of EU grants will drive further external deleveraging.
