The ratings agency Moody's thinks that the Spanish economy is "steadily" on its way toward recovery and recognizes the great efforts the nation has made to reforms its private and public sectors. Still, Moody's warns that growth in Spain, which exports are driving, faces serious threats in a high deficit and high national debt, which is practically 100% of GDP.
Unexpected fiascos inside Spain's borders or beyond could tear apart its healing wounds. That would force the government to accelerate its reform agenda in order to balance the budget. While families and companies have already started a massive deleveraging process, the government's deficit is expected to creep upward through 2016 because of excessive structural spending. If that can't be curtailed, then the recovery will tarry even more.
