BAKU, Azerbaijan, March 17. Moody's Investors Service has upgraded Greece's sovereign credit rating to Baa3 from Ba1, reflecting improved resilience to future economic shocks, Trend reports.
The upgrade follows a steady improvement in Greece's public finances, which have exceeded expectations, alongside a stable political environment and strong institutional reforms.
According to Moody’s, Greece is set to continue generating substantial primary surpluses, which will help reduce its high debt burden. The health of the banking sector is also improving, mitigating the risk of any potential banking crises impacting the country’s credit profile.
The stable outlook from Moody’s recognizes that while some of Greece's credit challenges will take time to address, the country's solid institutional framework and continued policy reforms offer a positive trajectory. The rating agency highlighted Greece’s strong performance in tax revenue collection, bolstered by anti-evasion measures and a push for modernization in tax administration.
Moody’s also raised Greece’s local and foreign currency country ceilings to Aa3 from A1, citing the stability provided by the euro area’s institutional and regulatory frameworks.
Looking ahead, Greece is expected to maintain large primary surpluses of around 2-2.5% of GDP. Moody's estimates Greece’s debt-to-GDP ratio will continue its downward trend, projecting it will decline from 156.1% in 2024 to 140.6% by 2026. This improvement is supported by a favourable debt structure, with an average maturity term of 18.8 years and all debt at fixed rates.
In 2024, Greece prepaid 7.9 billion euros of crisis-era debt and plans to make a 5 billion euro early repayment in 2025, continuing efforts to reduce its overall debt load.