Moody's upgrades Spain's credit rating one notch

They also gave the country a positive outlook, suggesting the potential of a further upgrade

Moody's has raised Spain's sovereign credit rating by one notch, citing progress in reforms to put the economy on a more sustainable track.

Moody's Investors Service yesterday upgraded the rating to Baa2 from Baa3, and gave the country a "positive outlook", suggesting the potential of a further upgrade.

Spain has made faster-than-expected progress in rebalancing the economy away from real-estate investment, where a 2008 price bubble crash sent the economy reeling, towards exports, the ratings firm said.

Moody's highlighted the authorities' progress in implementing broad structural reforms, especially in the labor market and the public pension system, as well as other measures including the restructuring of the Spanish banking system.

"These efforts support Moody's expectation of stronger, more sustainable economic growth over the medium term and continued improvements in the resilience of government finances.