Spain’s credit rating upgraded to A+ thanks to 2.6% GDP growth forecasts and ‘low exposure to Trump’s tariffs’

SPAIN’S economic outlook received a major boost this week after credit rating agency S&P upgraded the country’s sovereign debt rating to A+ with a stable outlook.

The agency said Spain’s economy had shown strong resilience, with growth this year forecast at 2.6% – three times the eurozone average. 

It also noted Spain’s limited exposure to US trade tariffs, which are being pushed once again under Donald Trump’s new administration.

S&P praised the role of immigration, particularly from Latin America, in supporting the labour market and fuelling demand. 

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Rising investment and the impact of earlier structural reforms were also highlighted as reasons behind the faster growth. 

The agency expects unemployment to fall below 10% by 2028, a level not seen since before the 2008 financial crisis.

The decision comes after more than a decade of deleveraging in the private sector, which has strengthened Spain’s external accounts and reduced its vulnerability to sudden shifts in global finance conditions. 

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This, S&P said, makes Spain more capable of weathering future economic shocks.

Economy Minister Carlos Cuerpo welcomed the upgrade, calling it “a reflection of the strength of our economy”. 

In a video message, he added that Spain will once again record the fastest growth among advanced economies this year, despite international uncertainty and slowing growth in its main European partners. 

The ministry estimates the higher rating will save the state around €350 million in interest costs by the end of the year.

However, S&P also warned of risks. Spain’s fragile coalition government has relied heavily on deals with regional parties, including debt relief and the controversial amnesty law for Catalan separatist leaders. 

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Accusations of corruption involving figures close to the government have also been flagged as potential threats to political stability.

The agency said ratings could be revised down if fiscal slippage reverses recent progress in reducing debt, or if political fragmentation undermines budgetary discipline.

Spain’s upgrade comes in contrast to France, which saw its debt rating cut by Fitch from AA- to A+ due to worsening public finances. 

The downgrade, just days after the appointment of France’s fourth prime minister in under two years, highlights the diverging paths of the eurozone’s two largest southern economies.

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