Greece hails S&P upgrade as proof of growth

ATHENS: Greece on Saturday welcomed its foreign debt rating upgrade by Standard and Poor’s as proof of further growth after a nearly decade-long debt crisis.

Emerging from its third straight bailout last year, Greece has a public debt of more than 180 per cent of gross domestic product and remains under strict supervision by its creditors.

S&P citing an improved budget outlook and solid growth prospects raised its grade for Greece’s foreign debt a notch to BB- on Friday.

“Greece’s sovereign debt rating upgrade by Standard & Poor’s proves that our economy is growing ever stronger,” Prime Minister Kyriakos Mitsotakis said in a tweet.

“Our reform agenda aims to attract investment, create jobs, accelerate growth and further restore trust in our economy. And we are fully committed to it”, he added.

Athens expects its economy to grow by 2.8 per cent in 2020 while respecting fiscal pledges to the country’s creditors, according to a draft budget released early this month.

“We project economic growth in Greece will average 2.5 per cent in 2019-2022, fuelled mainly by a recovery in domestic demand,” S&P Global Ratings said in its statement.

The agency pointed to a decision on public pensions — which will not be recalculated retroactively — and eliminating bonuses for civil servants, which together “significantly reduce budgetary risks for the Greek government.”

And despite removing restrictions on the flow of cash out of the country, there have not been “unusual deposit outflows,” the statement said.

“We believe the removal of restrictions will improve confidence in the economy, while reducing related financial costs, which is particularly relevant for the private-sector business environment,” S&P said.

The outlook for the debt remains positive, which means it could be upgraded again in the coming year.

Greece tabled a request to repay part of its IMF loans before the maturity date in September.

Finance Minister Christos Staikouras said early repayment would immediately save Greece around 70 million euros ($77.5 million).