In a powerful endorsement of its economic turnaround, Greece has been rewarded with a significant two-notch credit rating upgrade by the influential agency Moody's. The move lifts the country's rating from B1 to Ba3 and changes its outlook to 'stable', signalling that the worst of the financial crisis is firmly in the rear-view mirror.
The upgrade, which places Greece just two steps below investment grade, is a landmark moment for a nation once synonymous with fiscal chaos within the European Union. Moody's pointed to two pivotal factors driving its decision: a sharper-than-expected decline in its daunting public debt and a continued commitment to reform-minded political leadership.
A Nation Transformed: From Bailouts to Balance Sheets
Moody's forecasts are notably optimistic. The agency projects that Greece's debt-to-GDP ratio will plummet to a far more manageable 152% by 2024, a substantial improvement from previous estimates. This positive trajectory is fuelled by a combination of robust nominal economic growth and a primary budget surplus that consistently outperforms expectations.
'The first driver of the upgrade is the stronger-than-projected decline in the government's debt ratio,' Moody's stated, highlighting the country's impressive fiscal discipline.
Political Stability: The Bedrock of Recovery
Beyond the numbers, Moody's emphasised the crucial role of political stability under the centre-right government. This environment has proven fertile ground for pushing through essential reforms and maintaining a prudent fiscal path, assuring investors of the country's long-term commitment to sound economic management.
'The second driver is the evidence that the country's institutions and policy effectiveness have strengthened,' the agency noted, acknowledging the government's successful navigation of recent global economic headwinds.
The Road to Investment Grade
While this is a monumental leap forward, the journey is not yet complete. The coveted 'investment grade' status remains the next target. Achieving this would trigger a flood of capital from major international funds that are mandated to only invest in bonds of a certain rating, significantly lowering borrowing costs and solidifying the economic revival.
For Greece, this upgrade is more than just a financial metric; it is a symbol of national resilience and a testament to a hard-fought recovery that is now capturing the world's attention.
