Scope Ratings states this Friday that Spain is approaching the general elections on November 29 with a "solid economy," although it warns that "the main credit risk" is linked to the political scenario and that a possible institutional blockage could "hinder reforms."
In its report, the agency emphasizes that the country arrives at the electoral advance supported by robust growth, a diversified economy, a resilient labor market, and sustained investment prospects. However, it warns that "a prolonged political stalemate could weigh down the reformist momentum and slow down progress" on the still pending internal challenges, especially those related to "high public debt, high unemployment levels, spending pressures related to an aging population, and housing affordability."
According to the analysis, "the early general elections in Spain generate uncertainty regarding governance and policy execution, more than posing a direct challenge to the fundamentals of sovereign credit, supported by solid economic growth, improved fiscal indicators, and reduced external vulnerabilities." The document is signed by the executive director of Scope Ratings, Carlo Capuano, and the director of the sovereign and public sector, Marta Sáenz Abenz.
The authors highlight that the country faces the electoral cycle from a position of "relative economic strength," with GDP growth that, although it is expected to moderate from 2.8% in 2025 to an average close to 2.0% between 2026 and 2031, would remain "notably above" the eurozone average and comparable economies.
Therefore, they conclude that "the main credit risk associated with the elections is of a political nature, rather than economic." In this sense, they focus on the "increasingly fragmented parliamentary landscape" in Spain, which "can slow down decision-making, dilute political measures, and complicate fiscal management, especially when difficult spending decisions need to be made."
For debt holders, they add, "the main issue will be whether the elections lead to a Government capable of maintaining broad continuity in policies, including fiscal prudence," since a long period of negotiations to close a coalition or the repeated recourse to extended budgets "could slow down the implementation of reforms and reduce political flexibility, although this does not immediately alter the fiscal trajectory" of the country.
Furthermore, experts from Scope Ratings highlight that Spain's credit rating continues to be supported by "relatively independent" factors from the electoral cycle, such as the expectation that investment will remain beyond the execution of the "Next Generation EU" funds, a "solid" tourism sector, "favorable" migration trends, the improvement of the balance of payments, and "moderate" debt service costs. They emphasize that "these strengths provide a certain degree of resilience against short-term political uncertainty."
Thus, they consider it "unlikely" that the elections, by themselves, will constitute a "significant" credit event, although they point out that a clear Government majority or a stable coalition "would favor the predictability of policies," while a prolonged institutional blockage could end up hindering the reform program.
"In general, elections represent a risk to governance and policy execution, rather than an immediate threat to Spain's credit fundamentals. The credit outlook should continue to be supported by favorable economic and fiscal trends, as long as political developments do not derail the medium-term trajectory of fiscal consolidation and structural reforms," concludes the analysis.