The credit rating agency DBRS Morningstar has confirmed Spain’s solvency grade at ‘A’ with a stable trend and has indicated that although the country’s economic growth “is slowing down”, after two years of “strong results”, remains “better than the euro zone average.”

According to the agency, the stable trend reflects that the risks to credit ratings “are balanced.” It also points out that the recovery of purchasing power and the spending of European recovery funds “should mitigate the effects of restrictive monetary policy and external headwinds” next year.

Thus, he emphasizes that Spain’s credit ratings “continue to be supported by its large and diversified economy, its competitive export sector and its membership in the euro zone.” DBRS Morningstar expects these features, along with the implementation of its recovery and resilience plan, to “support the country’s economic performance.”

On the other hand, Spain’s high public debt ratio, as he explains, “limits the Government’s space to respond to shocks and weighs on fiscal accounts, especially in the context of higher financing costs and the increase in related expenses.” with the age”.

“The historically volatile dynamics of employment in Spain, high structural unemployment and slow labor productivity continue to constitute structural challenges,” says the agency, which warns that these aspects “limit the growth of per capita income and production potential.” “, despite the fact that the new labor market reform “is significantly reducing the proportion of temporary contracts in Spain.”

Likewise, DBRS points out that “the institutional and territorial challenge” of the Catalan independence parties “remains very limited, although political tensions could resurface.” In this sense, he considers that the new Executive of Pedro S├ínchez “will seek broad continuity in terms of fiscal policy and execution of Spain’s recovery plan.”

In DBRS Morningstar’s view, Spain’s ability to implement committed reforms and fully absorb Next Generation funds will remain crucial “to improve medium-term growth prospects and meet its long-term investment plans, especially as deficits taxes must be contained and elevated.