Good news for Spain as Fitch raises outlook
GLOBAL ratings agency Fitch raised its outlook on Spain's rating to stable from negative yesterday, saying the nation's overhaul of banks has "advanced well" and financing conditions have improved.
The company affirmed its BBB rating, the second-lowest investment grade.
Spain has improved its "policy track record" with improvements to its labour market, pension system and budget, it said.
The eurozone's fourth largest economy emerged from a more than two-year recession in the third quarter and the main Ibex 35 stock index has risen about 21pc this year as foreign investors return to the market.
The country first lost its top credit rating at Standard & Poor's in 2009 and hasn't been upgraded by any of the three main rating companies since. Moody's Investors Service and S&P rate Spain one step from junk.
Fitch said the recovery from recession came sooner than it had forecast and the adjustment from a current account deficit to surplus had been faster than expected.
The economy would remain weak, growing 0.5pc in 2014, it added, less than the government's 0.7pc estimate. "Medium-term growth prospects are weak, all sectors of the economy remain very indebted and unemployment is exceptionally high," Fitch said.
Spain's unemployment rate was 26pc in the third quarter.