Spain Loses AAA Rating at Fitch as It Struggles to Cut Debt
May 28th, 2010Via: Bloomberg:
Spain lost its AAA credit grade at Fitch Ratings, which said the country’s debt burden is likely to weigh on economic growth.
The ratings company cut the grade one step to AA+ and assigned it a “stable” outlook, according to a statement from London today. Spain has held the top rating since 2003.
Spain’s parliament yesterday approved the country’s deepest budget cuts in 30 years by a single vote, casting doubt on the future of the government as Prime Minister Jose Luis Rodriguez Zapatero seeks to garner support for his 2011 budget. Spain has the third-largest budget deficit in the euro region.
“The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium- term,” Brian Coulton, Fitch’s head of Europe, Middle East and Africa sovereign ratings in London, said in the statement.
Standard & Poor’s cut Spain’s ratings to AA on April 28.
Research Credit: E
