Greece moved closer to investment grade after Standard & Poor’s upgraded its debt-strapped sovereign rating by a notch to BB from BB- with positive outlook
Greece came close to the investment grade index on Friday at the end, after Standard & Poor’s updated the sovereign rating for the debt-strapped country to a BB level from BB- with a positive outlook.
Greece is now two notches below investment grade as a long climb towards recovery continues.
It fell into rubbish status in 2010 when 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 halted by the pandemic, returning to recession with an 8.2% contraction in gross domestic product last year. .
The crisis has also pushed national debt beyond 200% of GDP, while longer-than-expected lockdown 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 recovery funds and a continuing commitment to reform by the government despite the crisis are signs of hope.
“The structural reforms implemented by consecutive Greek governments in recent years have, in our view, improved the predictability of decision making,” S&P said. “This bodes well for the country’s economic and budgetary outlook once the impact of the pandemic subsides.”
In a tweet, Greek Finance Minister Christos Staikouras welcomed the news, which was seen as a surprise by many Greek commentators.
“Today’s update of our country by S&P Global Ratings is, without a doubt. an extremely positive development for the Greek economy “, he said.” It is the result of the elaboration 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 “.
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