Greece: Moody’s upgrade a real ‘vote of confidence’?

Rating agency Moody’s announced on November 29 2013 that it was upgrading Greece’s credit rating from C to Caa3 because of improved results in the country’s economic adjustment programme.

“Moody’s expects that the government will achieve (and possibly outperform) its target of a primary balance in 2013, and record a surplus in 2014 in accordance with the adjustment program,” the agency said. “Based on the government’s budget execution record up until October, Moody’s believes that [its] deficit target is likely to be within reach.”

Other reasons for the upgrade cited by Moody’s included improvement in Greece’s medium-term economic outlook supported by a cyclical recovery in the economy; progress made in implementing structural reforms and rebalancing the economy; and the significant reduction of the government’s interest burden following previous restructurings and official sector repayment assistance.

The news has pleased the Greek government as it boosts its hopes of returning to international capital markets next year.

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