S&P cited Spain's better economic prospects and
raised its forecasts for annual growth in 2014-2016 to an
average of 1.6 percent from 1.2 percent, reflecting the effects
of labor and other structural reforms.
Spain, which exited a five-year economic slump in the second
half of 2013, is hoping to grow 1.2 percent this year and 1.8
percent in 2015.
But it also has to deal with one of the highest unemployment
rates and budget deficits in the European Union while its banks,
which needed a 42-billion-euro financial aid package in 2012,
are still only issuing loans restrictively.
"The outlook is stable, reflecting our current view that risks
to the ratings on Spain will remain balanced over the next two
years," the agency said in a statement.
Spain, like other struggling euro zone countries, has benefited
in recent months from a renewed appetite for its debt from
international investors as fears of a break-up of the euro
single currency eased and reforms started to pay off.
Credit agency counterpart Fitch on Friday upgraded its rating on
Greece to B and gave it a stable outlook, citing the
government's improving record on fiscal issues. [ID:nL3N0O90ZG]
The agency had raised Spain's sovereign credit rating by one
notch to BBB+, three steps above junk, on April 25 while Moody's
raised Spain to two notches above junk in February.
(Reporting by Ian Chua and Julien Toyer; Editing by John
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