Madrid (EFE).- The Fitch rating agency has confirmed Spain’s grade at A- (remarkable low) with a stable outlook supported by a solid economy “despite external headwinds”, while raising 0. 7 points the growth forecast for this year, up to 1.9%.
The Government has made progress in its reform agenda
In its report published this Friday, Fitch highlights that the Government has made progress in its structural reform agenda “with some first signs of positive impacts on the economy and public finances”, although high public debt is still maintained, structurally high and low productivity that limits growth potential.
The report points to the good evolution of public revenue in 2022, which it partly attributes to the post-pandemic rebound but also to the labor market reform that has helped reduce temporary employment
Fitch expects the public deficit to drop to 4.1
Fitch expects the public deficit to fall to 4.1% of GDP in 2023 and 3.4% in 2024, 0.2 and 0.4 percentage points respectively above the targets committed by the Government.
Regarding public debt, it projects a reduction to 110.4% of GDP in 2024, driven more by GDP growth than by the reduction of the primary fiscal deficit.
Real disbursement of European funds less than 37,000 million
In a context of high inflation and tighter financial conditions, Fitch assures that the result of this year’s double election “presents a degree of uncertainty for public finances, with a certain risk of fiscal easing.”
Regarding the deployment of European funds, he points out that Spain has received 53% of the total allocation of 69,500 million euros in direct transfers, but he stresses that the effective disbursement of funds to the real economy has been less than 37,000 million.