More Pain In Spain As Economy Goes Down The Drain | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

More Pain In Spain As Economy Goes Down The Drain

There was more bad news for Europe's attempt to rebuild its economy: Standard & Poor announced Thursday that it was downgrading Spain's long-term sovereign credit rating by two notches – from "A" to "BBB+." The agency also lowered Spain's short-term sovereign credit rating to "A-2" from "A-1," and said the outlook on the long-term rating is negative.

In a statement, S&P said the downgrade reflects its view that the country's budget outlook will fall amid a contracting economy, and the government will likely have to bolster the banking sector. This, the rating agency said, could lead to growing government debt.

"The negative outlook on the long-term rating reflects our view of the significant risks to Spain's economic growth and budgetary performance, and the impact we believe this will likely have on the sovereign's creditworthiness," S&P said.

The agency lowered estimates for Spain's GDP growth. It said the economy would contract by 1.5 percent in 2012 and 0.5 percent in 2013. Previously, it had predicted growth of 0.3 percent in 2012 and 1 percent in 2013. Declining disposable incomes, private sector deleveraging were among reasons for the drag.

The economic unrest uncertainty Spain prompted a massive national strike last month. Earlier this month, a weak Spanish bond auction sparked a sell-off on global markets.

Spain is by no means the only European country with economic problems. Earlier this week, Britain, which is not a member of the euro zone, sank back into recession in the first three months of the year.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

WAMU 88.5

Art Beat With Lauren Landau, Oct. 23

You can see a play and hear music made famous by film.

NPR

Why California's Drought-Stressed Fruit May Be Better For You

Is California's severe drought hurting the nutrient content of fruit? No, preliminary data on pomegranates suggest. The fruit may be smaller, but packed with more antioxidants, tests show.
NPR

In North Carolina, Latino Voters Could Decide Tight Senate Race

Latinos make up 9 percent of the state's population and 2 percent of registered voters, and a new poll shows many are undecided. In Charlotte, Michel Martin learns more about their growing influence.
NPR

Mark Zuckerberg Shows Off His Mandarin Chinese Skills

The Facebook co-founder and CEO spoke at Tsinghua University in Beijing for about 30 minutes. In Mandarin. His audience liked it.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.