KBRA affirms Kingdom of Spain’s long-term and short-term issuer ratings and revises the Outlook on the long-term ratings to Positive from Stable.
Ratings Outlook
The Positive Outlook reflects KBRA’s expectation of continued gradual fiscal adjustment despite political fragmentation, supported by Spain’s favourable economic growth prospects. Spain’s economy is expected to continue to outperform the euro area, underpinned by a strengthening labour market and an increasingly diversified services export base. These factors should support further improvements in public finances, although government debt ratios are likely to remain elevated over the medium term. Spain remains exposed to global trade disruptions and geopolitical tensions while political fragmentation could also slow the reforms and investment needed to address structural growth challenges.
Key Credit Considerations
The ratings were affirmed because of the following key credit considerations:
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