Greek Government Welcomes Moody’s Credit Rating Upgrade

Photo source: Moody’s

The Greek government welcomed Moody’s decision to upgrade the country’s credit rating from Ba3 to Ba1 with a stable outlook reflecting a growing confidence in the health of the Greek economy.

The revised rating is closer to investment grade, which once achieved would pave the way for major global investments.

The positive rating announced on Friday comes after Japan’s R&I, Germany’s Scope Ratings Agency and Canada’s DBRS Morningstar upgraded Greece to investment grade.

Greek Economy and Finance Minister Kostis Hatzidakis. Photo source: @khatzidakis.

Ratings issued by Moody’s and DBRS Morningstar are taken into account by the European Central Bank (ECB). Two more agencies (Standard and Poor’s and Fitch) are also expected to revise Greece’s credit rating by the end of the year.

Moody’s analysts underlined however that progress was dependent on the full and timely implementation of fiscal measures and economic reforms. It also added that the country’s economy was susceptible to external shocks particularly in view of its reliance on major sectors such as shipping and tourism.

The rating agency attributed the revised outlook to the Greek government’s commitment to implement reforms and policies, to the “broad consensus in society for these policies”, and to the “high degree of political and policy certainty for the coming four years”.

Commenting on the news, Greece’s Economy and Finance Minister Kostis Hatzidakis said the upgrade was “not just another reward for the government’s fiscal and overall economic policy. It is mainly a proof that the government must remain loyal to a prudent fiscal policy”.

Hatzidakis went on to add that despite the difficulties, Greece will “remain committed to the goals that have been set and to the achievement of the corresponding primary surpluses. Steadily, we will continue to combine social sensitivity with financial responsibility,” he said.

Greece saw its credit ratings plunge during the 2010 economic crisis.

Greek Prime Minister Kyriakos Mitsotakis at the 87th Thessaloniki International Fair. Photo source: Press Office of PM

According to Moody’s, increasing investment activity and stronger consumption are set to drive Greece’s GDP growth by 2.2 percent annually in 2023-27.

The agency expects the share of investment to rise to around 18 percent of GDP in 2027 from 13.7 percent in 2022.

Prime Minister Kyriakos Mitsotakis also referred to the Moody’s upgrade during his address to the nation at the 87th Thessaloniki International Fair (TIF) on Saturday. He said the new credit rating was “crucial to more favorable borrowing for the state, businesses and households, a sign of confidence in the prospects of the economy, but also a source of growth, with new capital for jobs, which the country had been deprived of for years”.