Moody’s Investors Service (MCO) said Wednesday that it is considering downgrading Spain’s Aaa sovereign ratings, citing challenges Spain faces to achieve fiscal targets.
“Spain’s growth prospects are weaker than those of other Aaa-rated sovereigns,” said Kathrin Muehlbronner, a Moody’s vice president and lead analyst for Spain, in a statement. “In the short term, the government’s accelerated fiscal consolidation combined with the higher borrowing costs currently facing the government, consumers, and businesses will likely depress growth.”
The rating agency also said that it may cut the ratings by one or two notches at the most. According to MW, the potential downgrade could be as a result of the country’s deteriorating economic conditions.
Moody’s intends to conclude its review within a three-month period.