27 Apr 2012

Spain rating lowered

12:23 pm on 27 April 2012

Standard Poor's has cut Spain's credit rating and warned that further downgrades can't be ruled out.

The ratings agency lowered Spain by two notches to BBB+, warning that the country's budget problems are likely to get worse. It also placed Spain on negative outlook.

SP predicts the economy will shrink by 1.5% this year, having previously forecast 0.3% growth.

Both Moody's and Fitch Ratings have also warned Spain's credit rating may be downgraded.

In response, the government said the agency had not taken into account reforms proposed to activate the economy.