Moody’s raises Greece’s outlook to Positive
Moody’s raised Greece’s credit rating outlook to “Positive” from “Stable” on Friday, but stopped short of lifting the country out of junk status and into investment grade.
The US-based rating agency, the only one among the majors not to revert Greece to investment grade yet, said in its scheduled biennial report on the Greek economy that it affirms the country’s credit rating at Ba1, i.e. one notch below investment grade, following the double upgrading last September.
However the upgrade now seems imminent, as Moody’s said the prospects for the Greek rating are “Positive”, against “Stable” in its previous report earlier this year.
Moody’s attributed the shift in the rating’s prospects to the positive course of the Greek banking system. It noted that the change in the outlook to Positive reflects the increased possibility of a sustained strengthening of the health of the banking sector, which reduces the risks for the Greek government. Furthermore, with economic growth and the fiscal course likely to exceed expectations, Greece’s fiscal strength could improve faster than expected.
In addition, the possibility of Greece exceeding expectations in terms of economic and fiscal performance, its economic strength may improve faster than current estimates, it added.
