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Moody's improves Catalonia's ratings outlook

Declaration of independence impact on country's GDP and industrial sector "limited," says agency


21 October 2018 11:43 AM


ACN | Barcelona

Moody's has improved Catalonia's ratings outlook from "negative" to "stable".

In a press release made public on Friday, the ratings agency argued that they had expected a "significant deterioration" of the Catalan economy after the declaration of independence last October but, according to the financial services firm, in the end the impact was "limited."

Moody's says that in the last quarter of 2017 there was a "slowdown" in the country's domestic demand growth, but overall its effects on the annual GDP were "limited" as Catalonia's economy grew by 3.3%, versus 3.1% at the level of Spain as a whole in 2017.

The ratings agency also highlighted that the industry sector "remained seemingly intact" after the October 2017 turmoil, growing above the Spanish level as well.


  • "Moody's view that a significant deterioration in the region's economy after the unilateral declaration of independence in October 2017 has been limited"

    Moody's · Rating agency

"As a result the rating agency notes that Catalonia continues to be the largest regional economy in Spain and contributes 19% of Spain's GDP," claims the report.

The other reason for improving the country's ratings outlook is that, according to Moody's, Catalonia "benefits from Spain's economic growth" which is helping it reducing its deficit and debt. 

This way the long-term issuer and debt ratings stay at Ba3 level, but instead of having a negative outlook, now the forecast is stable.

Reasons for possible upgrade or downgrade

For Moody's, the ratings level could upgrade if Catalonia's "fiscal and financial performance significantly improved" or with a "strengthening of support" from the Spanish government.

Yet the level could downgrade if Spain supported less Catalonia, or "if policy changes reversed [Catalonia's] fiscal consolidation or if the region's fiscal performance deteriorated."


  • Catalan Vice President and economy minister Pere Aragonès during an interview with ACN (by ACN)

  • Catalan Vice President and economy minister Pere Aragonès during an interview with ACN (by ACN)