July 24, 2021

S & P downgrades its growth forecast for Spain this year – La Provincia

S & P downgrades its growth forecast for Spain this year - La Provincia

Thecredit rating agency S & P Global Ratingshas revised its growth forecast for the Spanish economy by one tenth downwards in 2018, when the GDP expansion will slow to 2.7%, although it has increased its forecast for 2019 to 2.4% from 2.3%, thus maintaining Spain as the largest European economy that will grow the most in the coming years.

Looking ahead to the longer term, S & P Global projects aGDP expansion of 2.1% in 2020 and 1.8% in 2021, in line with the forecasts of the agency published at the end of September, when the rating agency decided to maintain the 'A-' rating of Spain with a positive outlook.

In its analysis, S & P Global anticipates thatthe consumption of Spanish homes will remain strong this yearand it will begin to decelerate as of 2019, as job creation loses momentum if there are no new measures by the Government.

In this sense, the agency continues to consider "key risks" for the Spanish economy the slowdown in world trade and protectionist policies, warning of the negative impact on the growth of the rise in oil prices as Spain is more dependent on imports from raw than its neighbors.

Likewise,"the high parliamentary fragmentation represents another risk, since it could prevent further reforms, for example in the labor market. "

In this regard, the new projections of the agency bet that the rate of unemployment will continue to fall, which this year will fall to 15.5% and to 14.3% the next, to fall to 13.3% in 2020 and 12 , 5% in 2021.

In the case ofeuro zone set, S & P Global has revised down its growth forecast for 2018 to 2% from 2.1% and has remained unchanged next year at 1.7%, while for the next two years the agency relies on that the region will grow by 1.6% and 1.5%.


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