Fitch upgrades Greece on lower political risk, economic growth
Fitch on Friday lifted its sovereign rating on Greece, saying that the country seems to be on course for general government debt sustainability, thanks to a growing economy, waning political risks and government budget surpluses that beat creditors’ target.
The rating agency said it was upgrading Greece from B- to B, with a positive outlook. That still leaves the country — which is hoping to exit its third EU bailout programme later this year — firmly in speculative territory.
But for Greece — which has been the recipient of the EU’s economic intervention since 2010, as it faced a massive debt crisis — it is a welcome sign that its recovery is gaining traction, after it posted three straight quarters of economic growth for the first time since 2006.
Fitch analysts wrote: Fitch believes that general government debt sustainability will improve, underpinned by sustained GDP growth, reduced political risks, a record of general government primary surpluses and additional fiscal measures legislated to take effect through 2020.
Last month, fellow agency S&P Global Ratings made a similar move, boosting its rating on Greece while still leaving it below investment grade. Moody’s, the other major rating agency, most recently assigned Greece a Caa2 rating in its last action on June 23, according to Thomson Reuters.