Greece’s government has celebrated a pivotal upgrade in its credit rating by Moody’s, marking a significant shift away from its challenging economic past. This recent elevation from junk status, 15 years in the making, is a powerful symbol of the nation’s economic progress.
This upgrade by Moody’s to Baa3 from Ba1 is not just a financial adjustment but a recognition of Greece’s return to economic stability. Finance Minister Kostis Hatzidakis described this development as a milestone for the nation, emphasizing that it is a testament to the combined efforts of the government and the Greek populace. The decision underscores the improved public finances and the expectation for Greece to maintain substantial primary surpluses, gradually decreasing its hefty debt.
The road to this upgrade has been arduous. Greece first spiraled into economic turmoil in 2010, requiring three international bailouts to stave off bankruptcy. These were coupled with stringent austerity measures imposed by European lenders and the International Monetary Fund. The country’s national debt hit a peak of over 200% of its GDP in 2020. However, due to concerted fiscal policies and economic strategies, it is expected to decline below 150% this year, as projected by the Greek central bank.
Moody’s decision came against a backdrop of political and social turbulence, with recent strikes and protests related to a rail disaster two years prior putting additional pressure on the government. Despite these challenges, the government remains focused on reforms intended to attract investment and foster sustainable growth.
Prime Minister Kyriakos Mitsotakis reiterated the government’s commitment to reform in a social media post, highlighting the importance of attracting investment and creating employment opportunities. This upgrade by Moody’s is the final step in regaining investment-grade status among all major rating agencies, which had gradually begun reinstating Greece’s standing since late 2023.
Economically, Greece is showing promising signs of recovery. The agency cited ongoing institutional improvements in tax compliance and collection as significant contributors to the improved fiscal landscape. These aspects have resulted in tax revenues growing at a faster pace, further solidifying the country’s financial outlook.
The recent elevation in Greece’s credit rating marks an encouraging chapter in its economic story. While challenges remain, particularly on the political front, the Greek government’s dedication to fiscal prudence and structural reform appears to be paving the way for a more stable and prosperous future.
