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.”

Original Story: Ekathimerini
Photo: Moody’s
Edition: Prime Yield