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Spain’s outlook was upgraded to positive from stable by credit analysts with S&P Global on Friday, signalling a rosier view of the fourth largest eurozone economy.

Analysts with S&P, who affirmed their triple-B plus rating on Friday, said they could upgrade the kingdom’s rating within the next two years should its “strong economic performance” and budgetary consolidation continue in line with its forecasts.

The rating agency forecasts Spain’s economy will expand by a further 2.5 per cent this year, following a 3.2 per cent expansion in both 2015 and 2016. The country has won praise from the International Monetary Fund for undertaking structural reforms and an “impressive” economic recovery since the financial crisis.

S&P analyst Marko Mrsnik added that he could also envision raising the country’s rating if the government succeeds in further consolidating public finances or if monetary policy from the European Central Bank improves financial conditions.

Yields on Spanish 10-year sovereign debt, which move inversely to its price, have fallen 25 basis points from a 16-month high touched earlier this month. At 1.64 per cent, the yield is nonetheless higher than where it ended 2016 at 1.38 per cent.

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