Fitch: Catalonia's secession from Spain is very unlikely

Eren Sengezer FXStreet

"The confrontational nature of the vote on Catalonia independence has increased near-term political risks," Fitch Ratings said in a recently published report.

Key quotes:

The immediate consequences of Sunday's vote are hard to predict.
There remains a risk of fresh disturbances.
The recent events could also weaken the ability of Spain's minority Popular Party government to implement national policy.
We view Catalonia's secession from Spain as very unlikely, and our central assumption remains that there will ultimately be a settlement on regional financial reform and greater autonomy for Catalonia within Spain.
We forecast above-trend GDP growth of 3.1% in 2017 and 2.5% in 2018, but a further sustained escalation in tensions between the Catalonia and Spanish governments would represent a downside risk.
A further escalation of tensions that undermine these assumptions could prompt negative rating action.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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