London: On Friday, credit ratings agency Fitch revised its outlook on Spain from “stable” to “positive,” highlighting structural improvements that enhance the country’s GDP growth potential and resilience to external economic shocks. Despite maintaining Spain’s credit rating at “A-“, Fitch emphasized Spain’s strengthening position in the eurozone.
“Positive labour market trends boosted by strong net migration and reform, improved competitiveness, and the absence of macro-financial imbalances, underpin Fitch’s assessment that Spain will continue outperforming its eurozone peers over our forecast horizon,” the agency stated.
Spain stands out within the eurozone, largely due to its robust tourism-driven services sector and resilient manufacturing performance, even as weak industrial demand dampens growth across the region. In the third quarter of this year, Spain’s economy exceeded expectations with a 0.8% quarterly growth rate and a 3.4% annual increase, outpacing many European economies.
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Looking forward, Fitch has projected Spain’s real GDP to grow by 2.9% in 2024, with a moderate average growth rate of 2.2% for 2025 and 2026.
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However, Fitch noted ongoing political and economic challenges. Socialist Prime Minister Pedro Sanchez’s coalition relies on smaller parties to pass legislation, creating potential risks to policy continuity and implementation. The Sanchez administration aims to meet its fiscal targets through tax reform, though it faces increased expenditure pressures.
