The ratings reflect the Kingdom of Spain's strong fiscal position, which has been supported by expenditure control, declining interest payments, and healthy revenues. Although the general government has recorded small deficits in recent years, we expect modest surpluses in the medium term thanks to buoyant revenue growth at the central government level, social security surpluses, and the largely balanced position of Spanish local and regional governments. Moreover, the debt-to-GDP ratio is likely to continue its downward trend toward 30%, declining by more than 20 percentage points between 2000 and 2010. Spain's real GDP growth has outperformed that of its 'AAA' rated peers by more than one percentage point per year on average during the past decade. Moreover, with employment growth
