Spain faces risks “on the downside” to its credit rating as growth slows and regional governments fall behind schedule on deficit-reduction targets, Fitch Ratings Director Douglas Renwick said.
“Risks for the credit rating are clearly on the downside,” London-based Renwick said in a telephone interview yesterday. “The regional deficit performance adds to pressure on the central government to make the needed cuts.”
Fitch rates Spain AA+ with a “negative” outlook, and Renwick said weaker growth, failure to meet deficit targets, or larger-than-forecast use of public funds to rescue banks could be “clear triggers for the rating.” Moody’s Investors Service has an Aa2 rating on Spain and Standard & Poor’s rates it AA.
Spain’s regional governments are behind schedule to meet deficit targets, according to data released last week that Moody’s said was “credit negative.” The regional governments manage more than a third of public spending, including health and education, and are suffering from a slump in revenues linked to real-estate transactions.
The 17 semi-autonomous regions posted a budget deficit of 1.2 percent of gross domestic product in the first half, the Finance Ministry said on Sept. 8, citing data that isn’t directly comparable to the figures used in the final deficit calculations. The regions have a deficit target of 1.3 percent of GDP this year.
http://www.bloomberg.com/news/2011-09-13/spain-s-credit-rating-risks-on-downside-as-regions-lag-goals-fitch-says.html
“Risks for the credit rating are clearly on the downside,” London-based Renwick said in a telephone interview yesterday. “The regional deficit performance adds to pressure on the central government to make the needed cuts.”
Fitch rates Spain AA+ with a “negative” outlook, and Renwick said weaker growth, failure to meet deficit targets, or larger-than-forecast use of public funds to rescue banks could be “clear triggers for the rating.” Moody’s Investors Service has an Aa2 rating on Spain and Standard & Poor’s rates it AA.
Spain’s regional governments are behind schedule to meet deficit targets, according to data released last week that Moody’s said was “credit negative.” The regional governments manage more than a third of public spending, including health and education, and are suffering from a slump in revenues linked to real-estate transactions.
The 17 semi-autonomous regions posted a budget deficit of 1.2 percent of gross domestic product in the first half, the Finance Ministry said on Sept. 8, citing data that isn’t directly comparable to the figures used in the final deficit calculations. The regions have a deficit target of 1.3 percent of GDP this year.
http://www.bloomberg.com/news/2011-09-13/spain-s-credit-rating-risks-on-downside-as-regions-lag-goals-fitch-says.html
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