S & P to downgrade Spain's sovereign credit outlook

Madrid, December 9 (Xinhua) US credit rating company Standard and poor 9th downgraded the outlook for Spain's sovereign credit rating from "stable" to "negative" and warned that Spain would face a prolonged economic slump. "We expect Spain's GDP growth rate to fall significantly and its fiscal deficit has been high," says Standard Poole. It also said the Spanish Government "lacks positive measures to rectify fiscal problems and lacks a stronger policy to promote the prospects for medium-term economic development." "Compared to other countries at the same rating, we believe that Spain faces a long-term economic performance below average and that, in the long run, its GDP will grow at an average annual rate of less than 1% per cent, due to higher private sector indebtedness and a lack of dynamism in the labour market," the agency said in a statement. "The government will face a downgrade in the next two years if it does not take" stronger action "to address the deficit," he warned.　　In January this year, S & P downgraded its long-term credit rating to Spain by one level, down from AAA to AA. But the agency believes the Spanish government still has time to make adjustments.　　If the Spanish government were to announce a specific fiscal policy by 2012, raising the fiscal surplus to more than 2% per cent of gross domestic product, the company would reassess its sovereign credit outlook. Affected by the subprime mortgage crisis and the bursting of the housing bubble, Spain's economy has shrunk for 5 consecutive quarters, the worst in the eurozone countries and the unemployment rate as high as 18%.　　Spain's economic recovery is not going well, and it is expected to reverse the negative growth as early as next year. 8th, Fitch, another credit-rating agency, downgraded Greece's sovereign credit rating from "A-" to "BBB", the first time a Greek sovereign credit has fallen below a level in the past 10 years.