Global ratings agency Moody’s has upgraded Greece’s rating to “Baa3” from “Ba1”, citing quicker-than-expected improvement in public finances and the country’s greater resilience to potential future shocks.
“Based on the government’s policy stance, institutional improvements that are bearing fruit, and a stable political environment, we expect Greece to continue to run substantial primary surpluses, which will steadily decrease its high debt burden,” Moody’s said in a statement.
Since 2020, the nation’s debt – the highest in the eurozone – has shrunk by more than 40 percentage points, reaching 154% of its gross domestic product in 2024, and is projected to drop further by the end of this year.
Greek banks are steadying and returning to profit after being nationalized following the 2009 financial meltdown caused by the country’s debt crisis, which put them in a vulnerable position, requiring several capital injections from the government.
Last week, Morningstar DBRS upgraded Greece’s credit rating to “BBB” from “BBB low”, two notches above the investment grade, citing a healthier banking sector and the continued reduction in the country’s general government debt ratio.
The agency also revised Greece’s outlook to “stable” from “positive”, reflecting a balance between persistent credit challenges that are slow to improve and the country’s institutional stability, which supports positive prospects.
Prime Minister Kyriakos Mitsotakis said in a post on the social media: “Moody’s upgrade of Greece to Baa3 marks the final step in restoring our investment grade by all major rating agencies, highlighting Greece’s significant progress. We remain fully committed to reforms that attract investment, create jobs, and drive sustainable growth.”
Outgoing National Economy and Finance Minister, to be sworn in as Deputy Prime Minister, Kostis Hatzidakis, welcomed the move late on Friday.
“I am pleased that my last statement as National Economy and Finance Minister concerns the upgrade of the Greek economy to investment grade by Moody’s,” he said.
“Today’s upgrade marks the end of a major cycle for the Greek economy and certifies the country’s return to European normality. It is the result of the systematic effort made over the last 5.5 years, which was not easy, amidst international crises and geopolitical instability. And it is obviously a success not only for the government, but for all Greeks. [Reuters, AMNA]
