Praised for Rapid Public Sector Improvement
All Three Major Rating Agencies Grant Investment Grade
Greece, which saw its credit rating plummet due to a national debt crisis, has regained investment-grade status from the international credit rating agency Moody's.
AFP and Bloomberg reported on the 15th (local time) that Moody's upgraded Greece's credit rating from non-investment grade (Ba1) to investment grade (Baa3), raising it by one notch. The credit rating outlook was also changed from 'stable' to 'positive.'
Moody's stated, "This upgrade reflects the assessment that the Greek economy is building resilience against potential shocks," and praised that "the public sector has improved faster than expected."
As a result, Greece has now received investment-grade ratings from all three major global credit rating agencies. Previously, Standard & Poor's (S&P) and Fitch also upgraded Greece's credit rating to investment grade last year.
Facing a national default crisis in 2008, Greece received a total of 289 billion euros (approximately 427 trillion won) in bailout funds from international creditors such as the European Union (EU) and the International Monetary Fund (IMF) in three rounds from 2010 to 2015. Greece graduated from the bailout program in March 2022.
During the fiscal crisis, Greece's credit rating plummeted. In 2011, Fitch downgraded Greece's credit rating from investment grade 'BBB-' to non-investment grade 'BB+'. Moody's and S&P also downgraded Greece's rating. At one point, S&P even classified Greece as being in selective default, just one step away from full default.
However, after Kyriakos Mitsotakis took office as Prime Minister in 2019 and pursued market-friendly economic policies, the Greek economy recovered its growth momentum. Greece's economic growth rates were 5.6% in 2022, 2.0% in 2023, and 2.3% last year, surpassing the average of major European countries. Growth of 2.5% is also expected this year. Nonetheless, high inflation and low wages continue to burden the Greek people.
Moody's forecasted, "Economic structural reforms will take time, and improvements in Greece's key credit issues will also proceed slowly."
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