The Standard and Poor's rating agency accredits the long-term stability of the Autonomous Community of the Canary Islands and maintains its long-term credit rating at 'A'.
Standard and Poor's bases its decision on the archipelago's "solid budgetary performance, its low and decreasing debt burden in relation to the national context, and an exceptional liquidity position." This rating is the highest that the autonomous community can obtain, since its rating cannot be, in any case, higher than that of the State, which places it among the administrations with the highest credit rating.
The rating or credit rating of the debt of an autonomous community evaluates its solvency and capacity to meet its financial commitments. The rating assigned to the Canary Islands, the letter A, demonstrates a strong capacity to meet its financial obligations.
Preliminary estimates place the increase in the real GDP of the Canary Islands at 3.9% in 2023, above the national average of 2.5%, which reflects the strong recovery of tourism in the region.
The credit agency highlights the prudent approach with which the Government team has decided to face existing uncertainties such as the lack of central government budgets for 2024, the possible absorption of regional debt, and how to apply the new fiscal rules. Thus, it recalls that the Autonomous Community of the Canary Islands chose to prepare a budget for 2024 with conservative revenue estimates and with a deficit of 0%; therefore, they foresee that the government of the Canary Islands will maintain its commitment to fiscal consolidation.
The debt of the islands is at 67%
In addition, the international agency values that the burden of the debt of the islands has decreased to around 67% of consolidated operating income in 2023 - from a maximum of 122% in 2015 - and they expect it to decrease to around 54% by 2026. On this particular, the Canary Islands has one of the lowest debt-to-GDP ratios of all the Spanish regions, with 12.2% at the end of 2023 compared to an average of 22.2%. It also highlights the exceptional liquidity position.
According to Standard & Poor's estimates, in this less favorable revenue environment, operating balances are likely to decrease slightly in 2025, while remaining above 7% of operating income and stabilizing in 2026.
The report emphasizes that the Canary Islands faces increasing pressure to control the growth of health spending, a challenge shared by all Spanish regions. However, we have seen an increase in budget allocations to health units in 2024.
