Fitch Upgrades Greece’s Rating to B-

Fitch Ratings has upgraded Greece’s credit rating from CCC to B- on Friday, an improvement that leaves the country’s state bonds well below investment grade.

Greece’s third bailout program review is due in the autumn and the ratings agency said that the outlook of the Greek economy was positive and that it expects talks with the country’s international creditors to be concluded “without creating instability.”

According to Fitch, the Eurogroup is expected to grant Greece substantial debt relief next year. That would boost market confidence and help Greece finance itself directly by issuing bonds after its current bailout program ends in August 2018.

Furthermore, Fitch said Greece’s political situation had become more stable and that there was “limited” risk that the government would not implement the necessary austerity reforms.

Fitch predicts that Greek debt sustainability would improve as the country is complying to the European Stability Mechanism rules. Furthermore, the ESM will take over the more expensive loans by the International Monetary Fund. It also considers positive the “development clause” that links Greek economic growth with debt relief measures.