The rating agency reduces its forecast for GDP growth and raises that of the public deficit, although it sees an economy with “high added value”
The Fitch rating agency confirmed this Friday night its A- rating with a stable outlook for Spain’s long-term sovereign debt. It did so by considering that the country has “an economy with high added value” and “solid governance indicators.”
However, he warns that the high levels of public debt “limit the ratings.” In this sense, he pointed out that the recovery of nominal Gross Domestic Product growth will translate “into a decrease in public debt in proportion to GDP until 2023.”
Nor does it forget the downward revision of growth forecasts, which “slowed down sharply in the first quarter.” However, he is confident that the pace will pick up in the third and fourth “with an increase in capital spending” related to the Recovery Plan and “a continued recovery in tourism that boosts exports.”
With these elements, Fitch analysts place the expected growth for real GDP this year at 4.4%, compared to the 6.3% they pointed out in their previous review, and put the public deficit at 5.1% ( before 4.4%), reports Europa Press.
Moreover, they estimate that the national economy will not reach its pre-pandemic level until the third quarter of 2023, in line with a “slight” decrease in the unemployment rate. In any case, they warn that “the risks” to their growth projections are firmly biased downwards and inflation forecasts (4.4% in 2022) upwards.
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