Spanish Prime Minister Pedro Sanchez leaves after giving a press conference during the United Nations 4th International Conference on Financing and Development in Seville, on July 1, 2025.
Cristina Quicler | Afp | Getty Images
Spain’s government has received yet another boost from credit rating agencies, with Fitch and Moody’s joining S&P to raise their respective assessments of the country.
The hat trick of rating upgrades comes as Spain’s economy continues to outpace its European peers, with the country’s government and central bank recently upgrading their 2025 growth forecasts.
Fitch on Friday upwardly revised Spain’s long-term rating to “A,” from “A-,” citing Spain’s favorable growth prospects.
“Recent productivity gains, moderate wage growth and relatively low energy prices have boosted external competitiveness and strengthened private external balance sheets,” Fitch said in a statement.
The ratings agency added that it expects Spain’s economy to remain resilient, “helped by limited exposure to U.S. tariffs and ongoing net external deleveraging.”
Moody’s also raised Spain’s rating last week by one notch, to “A3” from “Baa1,” saying the decision reflects its view that Madrid’s economic strength is improving due to a more balanced growth model, labor market improvements and a more robust banking sector.
Spain’s economy has been going from strength to strength of late, bolstered by foreign investment, tourism and immigration.
The country’s government said earlier this month that it expects gross domestic product (GDP) to expand by 2.7% this year, up from a previous forecast of 2.6%, and significantly above expectations of 1.2% growth seen for the broader euro area.
Earlier this month, S&P Global also gave Spain a rating upgrade, citing “notable improvement” in the country’s balance sheet and an improved resilience to economic shocks.
‘Structural reforms will be the true test’
Judith Arnal, senior fellow at the Elcano Royal Institute, a think tank in Madrid, said Spain has emerged as the clear growth leader among the euro area’s largest economies in recent years.
“Spain’s growth has relied not only on booming tourism but also on dynamic non-tourism services, such as business, telecoms and IT services. This marks a shift in the country’s growth pattern, showing that Spain has competitive firms able to export beyond traditional sectors,” Arnal told CNBC by email.
“Growth has also been closely linked to demographic dynamics and job creation. More than half of the jobs created since 2020 have been taken up by immigrants, which has supported overall GDP expansion but meant that GDP per capita has advanced less strongly. This reflects a more extensive than intensive growth model,” she added.
Looking ahead, Arnal said that while political uncertainty has not prevented Spain from leading euro area growth, the country’s economic performance could be even better with stronger stability.
“The government of Spain is keen to showcase this period of high growth, but fiscal consolidation and structural reforms will be the true test over the medium term,” Arnal said.
