Spain: will headwinds carry with them the hopes of an upgrade?

S&P will review the rating attributed to Spain on Friday 22 nd , March. We believe S&P will re affirm Spain’s sovereign rating of A-, on the back of strong economic fundamentals and slight improvements in the country’s fiscal position. However, three factors should deter S&P from upgrading Spain’s sovereign rating: 1/ the political fragmentation of the p arliament penalizes the implementation of structural reforms, 2/ the rejection of the 2019 budget plan is jeopardizing the government ´s fiscal consolidation efforts 3/ economic growth is expected to moderate in 2019 and w ill therefore provide less support to the debt ratio reduction .