We affirm the credit rating of the Kingdom of Spain at A- with Under Observation trend.
Spain is the fourth largest economy within the European Union, with a population of 46.9 million and a GDP of 1.2 trillion euros at the end of the 2021. The GDP per inhabitant stood close to 25,000 euros at the end of the same period.
The rating is based on the GDP growth potential that we expect to see in 2022 and 2023 subject to the high uncertainity regarding the current geopolical scenario which could push up over prices and humper the economic growth. However our rating considers the positive effect that the EU Next Gen will have on the growth potential in the medium term, in addition to the consolidation of the financial sector and the foreign sector. On the other hand, the rating continues to be constrained by the imbalances in the labor market, the narrow fiscal margin derived from persistents fiscal imbalances and the high levels of public debt.