Greece moves closer to investment grade with improved ratings
ATHENS: Greece moved closer to investment grade late Friday after Standard & Poor’s upgraded its sovereign rating for the debt-strapped country to BB, from BB- with a positive outlook.
“The upgrade reflects our expectation for a rapid improvement in Greece’s economic and fiscal performance as the negative impacts of the COVID-19 pandemic abate,” the rating agency said.
Greece is now two notches below the investment category as it continues a long rally towards recovery.
It fell into trash status in 2010 as the country sought its first of three successive international bailouts from other eurozone members and the International Monetary Fund.
Most of its debt is still held by bailout creditors, who provided generous repayment terms, but its recovery was interrupted by the pandemic, returning to recession with an 8.2% contraction in gross domestic product (GDP). ) Last year.
The crisis has also pushed the national debt to over 200% of GDP, while longer-than-expected foreclosure measures this year have forced officials to acknowledge that the official 4.8% growth projection now looks optimistic.
But S&P said massive economic support from EU stimulus funds and a continued government commitment to reform despite the crisis were encouraging signs.
“The structural reforms implemented by consecutive Greek governments over the past few years have, in our view, improved the predictability of policymaking,” said S&P. “This bodes well for the country’s economic and fiscal prospects once the impact of the pandemic subsides.”
In a tweet, Greek Finance Minister Christos Staikouras praised the news, which was seen as a surprise by many Greek commentators.
“The upgrade of our country today by S&P Global Ratings is without doubt an extremely positive development for the Greek economy,” he said.
“It is the result of the design and implementation of the right policies in the economic field, as well as, more generally, the result of the effective policy of the government and its series of reform initiatives.”