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It
raised late on Friday the country's local and foreign currency
long-term issuer ratings to 'BBB-/A-3', with a stable outlook,
citing stronger budgetary position.
The other two agencies, Fitch and Moody's, rate the country one
notch below investment grade. DBRS Morningstar upgraded Greece's
rating to investment grade BBB (low) last month.
S&P said it expects budget surplus target to help in paring the
country's government debt, and added that it is cautious about
political pressures hindering Greece's ability to sustain large
primary budget surpluses.
Greece lost its investment-grade credit rating, which implies a
low risk of default, in 2010 when its decade-long debt crisis
erupted, forcing it to sign up for international bailouts worth
about 260 billion euros ($275.34 billion) to stay afloat.
It emerged from the debt crisis in 2018 and was the only country
in the eurozone with a "junk" rating.
S&P expects "additional structural economic and budgetary
reforms, coupled with large EU funds, will support robust
economic growth in 2023-2026."
Greece expects economic output to rise 3% in 2024 following a
2.3% expansion this year more than twice the eurozone average.
It also projects a 2.1% of GDP primary budget surplus next year
on higher investment and strong tourism revenue.
The conservative government hopes now that the upgrade will
trigger more capital inflows and reduced borrowing cost for the
country's businesses.
"In the short and medium term, we expect inflows from
index-tracking funds, upgrade of banks assets and more favorable
borrowing cost for companies," a senior finance ministry
official told Reuters.
Greece's 10-year government bond yield was at 4.38% on Friday,
about 58 basis points below Italy's equivalent.
"I think all the ratings specific news is priced in. It’s
trading as investment grade anyway,” Rabobank senior rates
strategist Lyn Graham-Taylor told Reuters.
($1 = 0.9443 euros)
(Reporting by Akshita Toshniwal in Bengaluru and Lefteris
Papadimas in Athens, additional reporting Harry Robertson;
Editing by Shailesh Kuber and Marguerita Choy)
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