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Fitch Ratings has downgraded the credit of five Spanish regions, including the powerhouse of Catalonia, warning they will struggle to cut deficits in a weak economy. The red ink running through the accounts of Spain's regional governments is a major concern for the markets, which fear it could compromise the central government's goal to cut the annual public deficit. Fitch cut the ratings of Catalonia, Andalusia, the Canary Islands, Murcia and Valencia a week after official figures showed most regions missed their deficit targets for the first half of 2011. Lower credit ratings tend to make it more expensive to borrow on the debt market. Fitch also kept the long-term outlooks on all of them at "negative." The budget deficit for the 17 regions amounted to 1.2 per cent of gross...
Posted in: Fitch downgrades five Spanish regions
