Follow Spain immigration and Spain's economy: International rating agency Fitch announced on November 1st that it has affirmed Spain's long-term foreign and local currency issuer default ratings at BBB, and revised the rating outlook from "negative" to "stable".
Fitch stated that the reasons for upgrading Spain's rating outlook include, first, significant breakthroughs in Spain's fiscal policy from 2012 to 2013; despite facing numerous obstacles, the country managed to reduce its government deficit as a percentage of Gross Domestic Product (GDP) by 2.5 percentage points through fiscal consolidation policies. Second, the process of adjusting the current account balance sheet by the Spanish government has been faster than expected. Fitch has raised its projections for Spain's current account balance sheet and expects the country to achieve a current account surplus of 1.2% in 2013. Third, Spain's restructuring and reform of its domestic banking sector have been effective, with the Spanish government completing this reform at a cost of 6% of the country's GDP. Furthermore, in the second quarter of this year, the Spanish economy emerged from recession earlier than previously anticipated.
Fitch also pointed out that the Spanish economy is supported by high value-added and diversified economic activities, but the country's fiscal deficit remains high. It is projected that the deficit will account for 7% of GDP in 2013, and the debt-to-GDP ratio is expected to peak at 103% between 2015 and 2016, which is higher than previously expected; therefore, the BBB rating for Spain is maintained.