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Agency raises Spain credit rating

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 that 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 labour 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% from 1.2%

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% unemployment rate.

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