Moody’s, one of the Big Three Credit ratings business, lifted up Greece’s long-term issuer rating to “Caa2” from “Caa3” after Eurozone governance extended a credit lifeline to the country.
There was also a shift in its outlook to “positive”, a jump from “stable” previously, expressing the signs it identified show the country’s economy was coming to a steady.
This was in part due to the firm agreement by Greece’s creditors to send forth an aid plan to Greece this June, which before had been blocked by the disagreements in the Eurozone especially Germany and the International Monetary Fund.
The act diminished the horror of a short-term crisis, after eurozone governments agreed to give Greece a new credit lifeline of surmountable amt of 8.5 billion euros ($9.5 billion).
Moody’s said it expected Greece’s debt ratio to stabilize this year at 179 percent of GDP, also adding that growth should rebound to the economy this year and next.
In 1Q 2017, Greece returned to growth with a 0.4 percent increase in GDP, according to figures revised upwards in early June.
“It is too early to conclude that economic growth will be durable,” Moody’s said. However, with the help from IMF, which links financial aid to debt relief, negotiations with creditors for debt reduction had “made progress”. It has also signed an “agreement in principle” to allow swift assistance that eludes a payment crisis in Athens this summer.
Positivism is what IMF spokesman is conveying when it said, “If we did not think there was a good chance of reaching a debt deal, we would not have chosen that route,”
Moody’s also increased the long-term country ceilings for foreign-currency and local-currency bonds to B3 from Caa2.