S&P raises Spain credit rating as economy improves

MADRID - Standard & Poor's rating agency has upgraded Spain's sovereign credit grade a notch, the third agency to do so in recent months and a further sign the country is turning the corner after five years of economic turmoil.

The agency raised the grade to BBB from BBB-, citing improved economic prospects and praising the conservative government's structural and labor reforms since 2010.

Two other agencies, Moody's and Fitch, have also upgraded Spain this year.

Standard & Poor's also raised the country's average economic growth prediction for 2014-2016 to 1.6 percent from 1.2 percent.

The move reflects growing investor confidence in Spain's ability to repay debts. Spain's borrowing costs have dropped from perilously high rates in 2012 to pre-crisis levels although the country still has a massive 26 percent unemployment rate.