The country’s long-term foreign currency debt was upgraded to B with a positive outlook from B-, S&P said in a statement on Friday. The rating agency, projects real GDP growth of 2% for the Greek economy this year. The new ranking remains five levels below investment grade.
“Greece’s growth and fiscal outlooks have improved alongside a labor market recovery and amid a period of relative policy certainty,” S&P said. “The positive outlook on Greece reflects further upside rating potential from the policy and financing environment over the next year.”
The upgrade is the first time in two years that S&P has changed Greece’s rating. Fitch Ratings upgraded Greece to B- in August, while Moody’s Investors Service rates the country Caa2. Each is below the junk threshold.
“Policy uncertainty in Greece has receded since 2015 and absent any large shifts in the policymaking environment — which have in the past weighed considerably on growth – we anticipate a stronger economic recovery will take root,” S&P said.