Reuters logo
Fitch: Growing Pressure on La Rioja's Healthcare and Social Spending
July 12, 2017 / 8:55 AM / in 4 months

Fitch: Growing Pressure on La Rioja's Healthcare and Social Spending

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: What Investors Want to Know: The Autonomous Community of La Rioja's Economy here BARCELONA, July 12 (Fitch) Fitch Ratings says in a new report that the Autonomous Community of La Rioja is facing growing pressure from healthcare and social spending due to its rising elderly population. However, this is partly mitigated by the region's high standard of living and robust manufacturing and agricultural sectors. In 2016, 20.1% of La Rioja's population was over 65 (19.5% in 2000), and the National Statistics Institute reported that the region's over 85 age group accounted for 3.7% of the total population, up from 2.2% in 2000. This trend is likely to continue and as a result, increase pressures on healthcare and social services. The Servicio Riojano de Salud healthcare autonomous body manages three public hospitals in the region, totalling around 867 beds. Its budget has expanded to EUR270 million in 2017 (EUR191 million in 2006) and represents 19% of La Rioja's budget. It employs 3.3% of workers in the region. Social spending has also increased to EUR152 million in 2017 (EUR74 million in 2006) and represents 10% of La Rioja's budget. The Department of Social Services finances 17 residences for the elderly with 1,306 beds, which does not sufficiently address the needs of the over 85 age group, which numbered 11,554 in 2016. For instance, the department finances a high 56% of the cost of a public residence managed directly by itself. La Rioja has a large number of small municipalities, which could add to spending pressure as La Rioja is responsible for providing financial and advisory support to municipalities on infrastructure maintenance and service provision. However, 62% of La Rioja's population lives in the Logrono metropolitan area, while 145 of its 174 municipalities have fewer than 1,000 inhabitants, resulting in efficient service provision. Since 1995, La Rioja's GDP per capita has been the sixth-highest among 17 Spanish regions and in 2016 was 7.2% above the national average. The structure of La Rioja's economy mirrors that of Spain, except for the stronger and broader industrial and agricultural sectors, accounting for 26% and 6% of regional GDP in 2016 respectively (16% and 2.3% for Spain). Under Fitch's base case, La Rioja's economy in real terms is likely to grow in line with Spain's 2.8% in 2017 and 2.3% in 2018, supported by private consumption and external factors. La Rioja's labour market shows stronger characteristics than the national average, while the historical gap with the latter has increased during the financial crisis years. Its employment rate was 51.2% in 2016 (47.6% in Spain), compared with 51.4% in 2010 (48.3% in Spain) and the regional's ongoing economic recovery should support job creation. The report, "What Investors Want to Know: The Autonomous Community of La Rioja's Economy", is available on or by clicking the link above. Contact: Julia Carner Analyst +34 93 323 840 Guilhem Costes Senior Director +34 93 323 8410 Fitch Ratings Espana. S.A.U. Av. Diagonal, 601, Barcelona, 08028 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email:; Pilar Perez, Barcelona, Tel: +34 93 323 8414, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below