Moody's to Cut Spain's Rating

Moody’s Investors Service is poised to cut Spain’s credit rating very soon, a top Aaa that the country has held since 2001.

 

According to the Bloomberg's report, "five out of eight money managers surveyed predicted a one- step reduction to Aa1, with the rest forecasting a two-level cut to Aa2. The decision may come this week after Moody’s put Spain’s debt on review for a possible downgrade on June 30, saying it would conclude the analysis within three months".

 

Moody’s also said then it will be several years before Spain’s economy recovers from the collapse of its real estate boom, and its GDP  will expand an average of “slightly above” 1 percent between 2010 and 2014.

• A new rating will match  Fitch Ratings, which has a AA+.
• A two- level reduction would equal Standard & Poor’s.

Spain's growth was 0.2 percent in the second quarter and 0.1 percent in the first three months of  2010, and its unemployment stayed above 20 percent.. The economy will shrink 0.4 percent this year.

In the meantime, a general strike is set for today in Spain.