The Risk Assessment Agency Moody’s has lowered Spain’s economic rating from the highest rating AAA to Aa1.

In its report Moody’s has pointed to the weakness of the forecast for economic growth in Spain given that the construction sector and the housing market will take a few years to recover.

It has also said that Spain’s financial strength has been considerably weakened recently especially when compared to other economies with AAA rating.

Furthermore, Moody’s has also pointed to the large budget deficit that Spain has acquired which coupled with the high interest to be paid on its debt leaves the Spanish government ‘very vulnerable’ to future fluctuations in the markets.