Moody's raises Spain's outlook to 'positive', affirms 'Baa1' rating

Ratings agency Moody's on Friday raised Spain's outlook to "positive" from "stable", underpinned by a more balanced growth model for the country.

"The country's economic resiliency is supported by sound policy effectiveness, reflecting efforts to strengthen the economy's shock-absorption capacity," the agency said in a statement.

The ratings agency expects Spain's potential growth to be around 1.5% to 1.6%, with labour, capital and total factor productivity contributing positively.

The Spanish government forecast growth of 2% for 2024 while the European Commission forecast 1.7%, both above the forecasts of Europe's biggest economies.

Spain's economy was a rare bright spot in the euro zone in 2023 amid a robust jobs market and factors such as a surge in tourism and slowing inflation, while a struggling industrial sector and faltering demand dogged the rest of the region.

Moody's maintained its foreign currency rating for Spain at "Baa1".

S&P also reaffirmed its rating on Spain at "A/A-1", maintaining the country's outlook at "stable".