The agency noted in a statement that Greece’s public finances, institutions and banking system “are witnessing a profound change, which will allow for a significant improvement in the criteria” taken into account to determine the rating and thus “its resistance to possible future shocks.”
The agency said that the parliamentary majority resulting from the June legislative elections obtained by the right-wing New Democracy Party, led by Kyriakos Mitsotakis, “means a high degree of political visibility over the next four years.”
Moody’s attached its rating to a stable outlook, stressing that Greece still faces “structural challenges”, most notably the low level of investment, public debt, which is still high, and the aging of its population.
The Ba1 rating is the highest in the so-called speculative category, which is usually avoided by institutional investors because it indicates risks that threaten the borrower’s ability to repay its debts.
The two main rating agencies besides Moody’s, Standard & Poor’s and Fitch, had already raised their ratings to the same level in April 2022 and January 2023.
DBRS, a less influential agency, raised Greece’s rating last week to “investment grade” for the first time since 2010.
During the economic crisis (2010-2018), Greece suffered a series of credit rating downgrades, which prevented it from borrowing in the markets for three years, from 2014 to 2017.
Athens was forced to request assistance from the European Union and the International Monetary Fund, which, in exchange for loans, required it to implement strict austerity measures, which led to lower wages and increased unemployment.
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