The ratings on the Kingdom of Spain reflect: Continued progress with fiscal consolidation. The improvement in the general government performance, from a 3.2% deficit in 1997 to a balanced budget in 2001, has been due not only to declining interest payments and strong revenues, but also to tight expenditure control. The general government budget is projected to remain broadly in balance in 2002 or, at worst, to show a small deficit. The political commitment to fiscal discipline persists, as demonstrated by the government's target of achieving fiscal surpluses from 2004. Continued real convergence toward EU average income levels. GDP and employment have grown above the EU average since the mid-1990s. Real GDP increased by an annual average of nearly 4.0%
