AN upgrade of Andalucia’s credit rating has been issued once more by Standard & Poor’s (S&P), raising it from ‘A-‘ to ‘A’ and bringing it to the same level as the Community of Madrid.
The move marks the second time the rating agency has raised the region’s score since 2013, signalling growing confidence in the Junta de Andalucia’s financial management and economic performance.
According to S&P, the latest upgrade is largely due to the fact that 2025 budget results beat expectations and exceeded initial forecasts.
The agency now believes the region is on track to continue improving its finances over the coming years, with the prospect of a balanced budget by 2028.
In a statement, S&P highlighted Andalucia’s ‘commitment to budgetary stability and financial sustainability’, pointing to disciplined spending and solid revenue growth.
The region is also expected to reduce its debt faster than previously anticipated, without compromising what the agency described as a ‘robust liquidity position’.
Despite the impact of severe floods earlier in 2026, estimated to cost around €1.5 billion, the agency believes Andalucia is well placed to absorb the pressure.
Increased revenues, the use of accumulated surpluses and support from the European Union are all expected to offset the financial strain and avoid the need for additional borrowing.
S&P further noted that Andalucia will be able to meet its financing needs in 2026 without relying on central government liquidity mechanisms, a milestone not achieved since 2012.
The region has also strengthened its position in financial markets, becoming the second-largest issuer of bonds among Spain’s autonomous communities.
Economic growth has also played a key role in the improved outlook.
Andalucia recorded GDP growth of 3.2% in 2025, outperforming both the national and eurozone averages.
Tourism remains a major driver, with record activity levels, while investment in sectors such as energy and advanced data services has surged.
Foreign direct investment rose by 40% over the past year, alongside a historic increase in new business creation.
However, challenges remain.
Andalucia’s GDP per capita still lags behind the national average, and unemployment stands at 14.7%, significantly higher than Spain’s overall rate of 9.9%.
Even so, continued economic expansion is expected to gradually close this gap.
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