The latest edition of Coface’s Risk Review paints a significantly more adverse global economic scenario than a few months ago. The conflict in the Middle East, higher energy costs, trade tensions, and tighter financial conditions have led Coface to update its sovereign and sector risk ratings. In this context, Spain maintains its sovereign risk rating at A2 (low risk), consolidating its position among developed economies with the strongest profiles.
Every quarter, Coface analyzes corporate default risk across 160 countries based on macroeconomic, financial, political, and corporate insolvency indicators. To this end, it classifies economies into eight risk levels: A1 (‘very low’), A2 (‘low’), A3 (‘satisfactory’), A4 (‘reasonable’), B (‘reasonably high’), C (‘high’), D (‘very high’), and E (‘extreme’).
Thus, although the Spanish economy will moderate its growth this year, it will continue to display solid performance, supported by private consumption and investment, placing it among the eurozone’s best-performing economies.
Spain among the world’s lowest-risk economies
Within Europe, Spain shares the A2 rating with Portugal, the Netherlands, Belgium, and Sweden—the only European countries with this valuation—while large economies such as Germany, France, and the United Kingdom remain in the A3 (‘satisfactory risk’) category.
Internationally, the contrast is even more striking. Coface has downgraded the risk rating of eight countries in this edition of the report. Among them are Indonesia, Malaysia, the Philippines, and Vietnam, moving from A4 to B; Kuwait, which also slips from A4 to B; Tanzania, dropping from B to C; and Cambodia and Madagascar, moving from C to D. These revisions reflect the greater impact that the Middle East conflict and energy-supply tensions are having on the most exposed economies.
Outside Europe, Spain shares the A2 rating with other developed economies such as the United States, Japan, and Australia, reinforcing its position among the low-risk countries for business activity in an international environment marked by uncertainty.
Spain’s sector risk: the paper industry moves into ‘very high’ risk
Coface’s sector analysis shows a generally stable trend across most of Spain’s economic activities, though it highlights the deterioration of the paper industry, which worsens its rating from ‘high’ risk to ‘very high’. Thus, it becomes, along with the automotive sector, one of the only two sectors in the country placed at the highest risk level.
The pharmaceutical sector remains the best-performing activity, being the only one that maintains a ‘low’ risk rating. Meanwhile, construction, energy, information and communications technology (ICT), retail, and transportation continue at ‘medium’ risk.
In the ‘high’ risk category remain the agro-food, chemical industry, metallurgy, textile, and wood sectors, reflecting a still demanding context for much of Spain’s productive fabric.
