Not a real topic for the "shocked" investor since there is nothing shocking here, it was all expected.
S&P downgraded Spain’s rating by two notches due to “mounting risks to Spain's net general government debt as a share of GDP in light of the contracting economy”.
Spain's GDP is expected to shrink by 1.5% in 2012 and 0.5% in 2013.
The US-based ratings agency is also worried Spain’s troubled banking sector will require fiscal support from the government.
Now the country is rated at the same level as Ireland and Italy, which are also struggling with debt problems.
Meanwhile experts believe the Spanish economy is likely to show some improvement in the next few years.
But the country probably won’t meet its 2012 budget deficit target of a 5.3%.
Spain said that borrowing costs surged despite a 27.3B euro austerity program announced by the government late last month.
The country’s authorities pledge Spain won’t follow Greece and ask for financial help.
Friday, April 27, 2012
Posted by The Shocked Investor at 6:25 AM
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