EthiFinance Ratings, the European credit rating agency, has affirmed the rating of the Kingdom of Spain at “A-” with a stable outlook, supported by its most recent exhaustive analysis of the country’s economic and financial situation.
This credit rating confirmation comes from the positive GDP growth outlook for 2023, estimated to reach 2.4%, and on the downward trend in inflation, which remains at 3.4%, although still above the long-term inflation target set by the central bank.
It is noteworthy that Spain’s public debt has decreased to 109.8% of GDP at the close of the third quarter of 2023, while in terms of the cost of debt, a significant rebound in the average cost has been observed to 2.08%, exceeding the 1.64% recorded in 2021.
In any case, EthiFinance Ratings also highlights the persistence of downside risks that could affect the Kingdom of Spain’s credit rating going forward. These risks include worsening geopolitical risks in Europe and the Middle East, which could impact inflation correction and monetary policy; a deeper-than-projected economic slowdown; continued high interest rates, which would hinder access to financing; and parliamentary fragmentation in Spain that could complicate the legislature.
