Moody's ratings agency delivered a significant vote of confidence to Greece's economy on Friday by upgrading its credit rating by two notches. However, the country's bonds still remain one step below investment grade.
The upgrade indicates the government's commitment to a responsible fiscal policy, while also acknowledging the need for sensitivity to social issues. This marks the second time Moody's has upgraded Greece's rating since November 2020, when the country's bonds were downgraded to non-investment grade during the financial crisis. Last week, DBRS Morningstar also upgraded Greece's rating to investment grade. Moody's expects Greece's GDP to grow at an average rate of 2.2% annually from 2023-2027, driven by investment and consumption. The agency also anticipates a decrease in Greece's debt-to-GDP ratio, reaching close to 150% by 2024. However, Moody's warns that Greece's economy remains vulnerable to external shocks due to the significance of sectors like tourism and shipping.