Spain secures triple credit rating upgrade
3 Min Read
The upgrades coincide with Spain's remarkable economic resilience, where the economy expanded by 3.2% in 2024, far above the Eurozone average.
-
People cross the street in front of Spain's Central Bank in Madrid, March 12, 2015, file photo (AP)
Spain achieved a rare milestone in September 2025, receiving credit rating upgrades from Fitch, Moody's, and Standard & Poor's within the same month. The move underscores the country's robust economic performance, which continues to surpass most Eurozone peers.
On September 26, Fitch lifted Spain's long-term rating from "A-" to "A" with a stable outlook, citing productivity improvements, moderate wage growth, and reduced energy costs that have strengthened private sector balance sheets and improved external competitiveness.
Moody's followed with an upgrade from "Baa1" to "A3", highlighting a more balanced growth model, labor market improvements, and a stronger banking system. Earlier in the month, S&P Global also raised Spain’s rating, completing the triple upgrade for the first time in more than a decade.
The upgrades coincide with Spain's remarkable economic resilience. The economy expanded by 3.2% in 2024, far above the Eurozone average of just 0.9%. For 2025, GDP growth is projected between 2.6% and 2.7%, nearly double the regional forecast of 1.0–1.2%.
This momentum has been supported by strong foreign investment inflows, a rebound in tourism, and significant migration flows that have bolstered labor supply. Prime Minister Pedro Sanchez recently noted that immigration now contributes to nearly 40% of Spain’s economic growth, with 88% of new jobs in 2024 filled by foreign or dual nationals.
Labor market transformation
A landmark labor reform introduced in 2021 has reshaped Spain's employment structure. Temporary contracts have fallen sharply, while permanent employment has reached record highs. By late 2024, unemployment dropped to 11.2%, the lowest since the 2008 financial crisis.
Research at the Elcano Royal Institute in Madrid has shown that growth is no longer driven solely by tourism but increasingly by high-value service sectors such as IT, telecommunications, and business services. However, per capita growth remains modest, as much of the expansion has been fueled by migration-driven labor supply.
Challenges ahead
Despite the positive trajectory, rating agencies and experts warn of structural vulnerabilities. Spain continues to face high youth unemployment, demographic pressures from an aging population, and elevated public debt levels. These challenges could constrain fiscal flexibility in the medium term.
Nonetheless, all three agencies maintain a stable outlook for Spain, suggesting confidence in continued resilience. The OECD has also raised its 2025 growth forecast by 0.3 percentage points to 2.6%, reinforcing expectations that Spain will remain one of Europe's best-performing economies.
