(AP) Fitch Ratings cut Spain's credit rating on Friday, saying the government's efforts to reduce debt will weigh on economic growth in coming months - another blow to Prime Minister Jose Luis Rodriguez Zapatero's efforts to shore up confidence in state finances.
The ratings agency cut the country's rating one notch from AAA to AA plus, saying Zapatero's efforts to close the budget deficit "will materially reduce the rate of growth of the Spanish economy over the medium term."
The ratings agency decision echoes concerns from economists that efforts to cut state debt will also withdraw stimulus from the economy and hinder growth. Lower growth in turn means gathering less in tax revenues.
Spain currently has an unemployment rate of 20 percent and is struggling with large deficits and the hangover from a collapsed housing and real estate boom like that in the U.S.
Amid Financial Crisis, Spain's Credit Rating Cut - CBS News