Moody’s: Credit profile reflects progress

Greece’s stable credit profile has balanced government reforms in the last few years, accelerating economic growth, Moody’s said in a report released on Wednesday. The country’s large public debt remains the main challenge for its credit rating, it added.

The credit rating agency said that the country’s credit profile reflected a relatively high level of wealth in relation to the economy’s limited size and its limited differentiation. The current government has improved the country’s institutions and governance in several sectors.

“Thus, the country benefits from a favourable debt structure, a substantial cash buffer and strong debt affordability,” the report said. “Greece’s rating would come under upward pressure if further progress on structural reforms yielded tangible results in the form of stronger investment and further lifted and solidified medium-term growth prospects,” said Steffen Dyck, vice president and author of the report.

“Conversely, the rating would come under downward pressure if progress in reforming Greece’s institutions were to be reversed, putting at risk the agreement with the euro area creditors,” the report noted.

Moody’s chose not to issue a rating update due last Friday.