Speaking to CNBC on the sidelines of the G-20 meeting of world finance ministers in Sydney, Luis de Guindos, Minister of Economy and Competitiveness of Spain, said he was pleased with the ratings upgrade but that more work needed to be done.
"I think that if growth starts to pick up and accelerate as we are predicting now, and we are able to stabilize our public debt ratio, these two elements will be the two main factors behind a potential future additional upgrading of the Spanish economy," he said.
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De Guindos said he expects growth to continue to pick up this year.
"Our prediction now is that we will be close to 1 percent [gross domestic product growth in 2014]," he said.
Spain's central bank said last month that GDP shrank 1.2 percent in 2013 from a year earlier. Spain's economy grew by 0.3 percent in the fourth quarter form the previous one, marking its second quarter of expansion after two years of recession.
De Guindos added that Madrid would continue to focus on trying to bring down unemployment, which he says is "unacceptable" at the current level.
"The main macro-economic variable in 2014, that we are going to see for the first time, that we are going to create jobs in Spain," he added.
Spain is emerging from one of its deepest recessions in decades, but it continues to struggle with record high unemployment where one in four of the workforce are out of a job.
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The country's unemployment rate is at around 26 percent.
De Guindos also told CNBC that the recent pick up in foreign direct investment flows into Spain was a good sign for the economy.
"This is one of the main signs of the confidence and the thrust that the Spanish economy is gaining," he said.
He attributed the recent influx of flows to the progress Spain has made in reducing its fiscal deficit, maintaining a current account surplus, implementing structural reforms and regulating the banking sector.
"I think the situation in Spain is totally different to what it was two years ago. That's the main reason behind the confidence and the confidence is bringing foreign investment into Spain," he added.