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April 27, 2012 at 06:01 AM
Spain suffered another downgrade as Standard & Poor’s cut its sovereign credit rating and its unemployment rate rose to its highest level since the early 1990s—now one of the highest in the world.
Bloomberg reported Friday that the ratings agency dropped Spain’s credit rating by two notches late Thursday, citing the risk of an increase in bad loans at Spanish banks. The country is in its second recession in three years, and retail sales fell for the 21st consecutive month.
Spain’s credit rating now stands at BBB+, a few notches above junk and on par with Italy. While Fitch and Moody’s still rate Spain as having a “strong payment capacity,” S&P only considers it an “adequate payment capacity.” S&P also said that euro zone countries needed to better manage the debt crisis.
In the report, Foreign Minister Jose Manuel Garcia-Margallo said of the country’s economic situation, “The figures are terrible for everyone and terrible for the government … Spain is in a crisis of huge proportions.”
