(MENAFN- AFP) Standard and Poor's ratings agency upgraded its outlook for Spanish debt on Friday, highlighting the prospect of an export-led recovery after a two-year recession.
The New York-based agency kept Spain's long-term credit rating at BBB minus, just a notch above junk bond status, but raised the outlook to "stable" from "negative".
Though only a minimal upgrade, the rating action reflected a dramatic change in fortunes in Spain from mid-2012 when it seemed to be tottering on the brink of an all-out sovereign debt bailout.
The decision means Spain can shake off the immediate threat of its long-term debt being downgraded to speculative status, the equivalent of a "junk bond".
"Today's rating action reflects our view that Spain's external position is improving as economic growth gradually resumes," Standard & Poor's said in a statement.
Spain confirmed this week that it had emerged from a two-year recession in the third quarter of 2013, posting feeble 0.1 percent growth.
The Treasury has enjoyed a sharp drop in borrowing costs, too, as investors return in search of high returns.
Despite its emergence from recession, Spain's economy faces significant challenges including a 26-percent unemployment rate.
Also Friday The Netherlands lost its coveted "AAA" rating as S and P downgraded the country's rating to "AA+", citing weakening growth prospects.
"The downgrade reflects our opinion that The Netherlands' growth prospects are now weaker than we had previously anticipated," S&P wrote in a statement.
The "real GDP (gross domestic product) per capita trend growth rate is persistently lower than that of peers in similarly high levels of economic development."
The long-term outlook for the Netherlands, the eurozone's fifth-largest economy remained stable.
Only 10 countries worldwide, including seven in Europe, now retain the holy-grail AAA rating from the world's three major ratings agencies, Standard & Poors, Fitch and Moody's.
Among these, seven countries maintain a stable outlook on sovereign debt namely Sweden, Norway, Denmark, Switzerland, Australia, Canada and Singapore.
The other three -- Germany, Luxembourg and Finland all have their triple A status threatened by a negative outlook assigned by at least one of the three agencies.
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