The rating agency lowers its forecast for GDP growth and increases that of the government deficit, although it sees a “high value added” economy
The rating agency Fitch confirmed its A rating on Friday evening with a stable outlook for Spain’s long-term government debt. It did this by considering that the country has “a high value-added economy” and “solid governance indicators”.
However, he warns that the high government debt “limits the ratings”. In that sense, he pointed out that the recovery in nominal gross domestic product growth will translate into a decline in government debt-to-GDP ratio until 2023.
Nor does it forget the downward revision of growth forecasts, which “decelerated sharply in the first quarter”. However, he is confident the pace will pick up in the third and fourth periods “with an increase in capital expenditure” linked to the recovery plan and “a continued recovery in tourism fueling exports”.
With these elements, Fitch analysts estimate the projected real GDP growth this year at 4.4%, compared to the 6.3% they pointed to in their previous assessment, and estimate the government deficit at 5.1% (before 4 .4%), reports Europa Press.
In addition, they estimate that the national economy will not reach its pre-pandemic level until the third quarter of 2023, in line with a “slight” drop in the unemployment rate. In any case, they warn that “the risks” to their growth forecasts are sharply downwards and inflation forecasts (4.4% in 2022) are upwards.
Source: La Verdad
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