Moody’s: growth in Catalonia unhampered by independence bid
Rating agency expects public deficit to shrink in Catalonia, following GDP hike
BarcelonaMoody’s, the international rating agency, expects Catalonia’s public deficit to drop in 2016 thanks to “strong economic growth”. In a recent report Moody’s states that the political strain caused by the ongoing independence bid is not having an impact on Catalonia’s economic growth, as the Catalan authorities have managed to keep public spending stable and increase cash transfers from Madrid’s coffers.
Despite the positive outlook, Moody’s will be watching out for any changes in Catalonia’s finances for as long relations with Madrid remain strained. For now the report claims that Madrid is “unlikely” to halt cash transfers to Catalonia, as this remains one of Spain’s economic workhorses.
Moody’s latest forecast is in stark contrast with the agency’s own expectations at the start of this year, when it claimed that tensions between Barcelona and Madrid posed a “high risk”. Back then Moody’s downgraded the Catalan government’s public debt from stable to negative (Ba2/NP), which is effectively a junk bond rating.
