Fitch Ratings lowered the rating of five Spanish regions on Wednesday. [File photo]

Global rating agency Fitch Ratings downgraded the ratings of five Spanish regions Wednesday, as concerns continue to mount that local government's fiscal problems could undermine Spain's efforts to reduce its budget deficit.

Fitch Ratings said in a brief statement that it had lowered Andalucía province and the Canary Islands from AA- to A+, Catalu?a from A to A-, Murcia from AA- to A and Valencia from A to A-. The ratings giant also gave accordingly negative outlooks for the five regions.

"Sharp fiscal deterioration" was the main reason for the downgrades, the company said. The rating agency cited statistics from the Spanish finance ministry that total revenue for all Spanish regions in the first half of 2011 had dropped by 3.59 percent year-on-year, while the aggregate deficit accounted for 1.2 percent of the country's GDP. The finance ministry also predicted that 17 Spanish regions would not be able to achieve their deficit targets for the year.

Fitch Ratings maintained its AA+ rating on Spain as a whole this March, but changed its outlook for the country to negative, citing slow economic growth and the danger that one third of Spain's local governments would not meet their year-end deficit reduction targets.

China's business press carried the story above on Thursday.