Fitch Ratings downgraded Spain's credit ratings by one notch on Friday, saying the country's economic recovery will be more muted than the government forecast due to its austerity measures.

The downgrade reflects Fitch's assessment that the process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term, Fitch's analyst Brian Coulton said in a statement.

The ratings agency cut Spain's long-term foreign- and local-currency issuer default ratings to AA-plus from AAA. The outlook on the new ratings is stable.

(Reporting by Walter Brandimarte; editing by Jeffrey Benkoe)