Spain's economy has benefited from two rounds of labor market reforms since 2010, which have improved competitiveness of the export and services sector, and from easier financial conditions. We now project nominal GDP growth at about 4% over the next few years, which should support the general government's fiscal position and balance sheet, assuming the labor market recovery continues and deflation risks remain at bay. As a consequence, we are raising our long-term rating on Spain to 'BBB+' from 'BBB'. The stable outlook reflects our view that the broad-based economic recovery and gradual budgetary consolidation we anticipate in Spain should balance the risks from large net external debt. (Watch the CreditMatters TV segment titled "What's Driving The Improvement In Spain's
