The credit rating agency S
"Despite political uncertainty, the competitive Spanish economy, driven by services, should register growth rates above the euro zone average in 2023 and 2024," the agenda states.
The confirmation of Spain's rating reflects, according to S
Thus, S
All this despite the uncertain political scenario after the elections on July 23. In this sense, the agency has noted that any coalition agreement to form a minority government would likely involve "complex political concessions that could make the next government vulnerable to the demands of a few smaller parliamentary groups." If negotiations fail, Spain would repeat national elections early next year.
"So far, the political paralysis has had minimal effects on the Spanish economy," the rating agency said. By 2023, S
At the same time, the gross debt of the Spanish Public Administrations is expected to be around 108% of GDP in 2023, 12 percentage points above pre-pandemic levels, and that a large part of it will be in the hands of non-residents.
"The future pace of debt reduction depends on greater budgetary consolidation, Spain's economic growth prospects and the absence of new disruptions," the note warns.
Even so, gradual budgetary consolidation is expected between 2023 and 2026, although the agency has warned that the indexation of pension spending to inflation will continue to weigh on budgetary results, preventing the reduction of the debt of the Public Administrations.
The stable outlook reflects balanced risks to Spain's solvency, given high public debt, weakening demand in key European trading partners and political uncertainty.
