Moody's Downgrades Spain's Credit Rating On 'Negative Outlook'

Moody's Downgrades Spain's Credit Rating On 'Negative Outlook'

Spanish government bonds have been downgraded by the credit rating agency Moody's.

Spain's credit rating was cut to A1 from Aa2 and carries a negative outlook, Moody's said.

"No credible resolution of the current sovereign debt crisis has emerged and it will in any event take time for confidence in the area's political cohesion and growth prospects to be fully restored," Moody's said in a statement.

"In the meantime, Spain's large sovereign borrowing needs as well as the high external indebtedness of the Spanish banking and corporate sectors render it vulnerable to further funding stress."

The agency also cited weak prospects for growth in light of gloomy economic projections for Europe, and said that it expects the country's total GDP growth in 2012 to be 1 per cent "at best".


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