Markets tumble after Fitch cuts Spain’s ratings
![map[3]](http://www.soundmoneyinstitute.com/wp-content/uploads/2010/05/map3.jpg "map[3]")
Fitch Ratings cut Spain’s credit ratings to AA+ from AAA on Friday, saying its economic recovery would be more muted than the government forecast, pushing world equities and the euro lower.
The downgrade follows a cut by another agency Standard and Poor’s last month and heaps more pressure on the government, battling to reassure markets its fiscal, political and social woes will not end up in a Greek-style debt crisis.
Fitch said Spain’s deleveraging of record-high levels of household and corporate debt and growing levels of government debt would drag on economic growth.
“The downgrade reflects Fitch’s assessment that the process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term,” Fitch’s analyst Brian Coulton said in a statement.
Read More: – Reuters
