Standard & Poor’s ratings agency upgraded Greece’s debt rating, thanks to the country’s progress in its fiscal reform efforts and its potential return to economic development.
S&P placed Greece at B from B-minus, while they announced on Friday that the outlook for the rating is stable.
“The upgrade reflects our view that risks to fiscal consolidation in Greece have abated,” the firm stated.
S&P expressed its belief that Greece will begin to emerge from the severe financial crisis next year, saying that the country’s recovery is “gradual but weak,” while marked that the country has enough funds to cover future bank recapitalization.
It appears that the Greek economy is recovering after the reopening of two medium-term Greek bonds met strong demand. The Greek Finance Ministry said on Friday that it has achieved a primary budget surplus for the first eight months of the year.
Greece and its international lenders expect 0.6% GDP growth this year, which would be its first growth since 2007.
S&P also said that it will upgrade Greece further if GDP growth is achieved or if the country’s institutional framework strengthens.
Of course, there is still risk that the Greek government asks its private creditors to take part in a third debt restructuring. The ratings agency, however, believes that such a scenario is not possible.
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