Greece's credit rating upgraded to investment grade, signaling economic recovery
- Greece's credit rating was raised by Moody's from Ba1 to Baa3, marking a significant upgrade.
- The rating change reflects improvements in public finances and a stable political environment.
- This upgrade signifies the closing of a challenging era, highlighting progress made in restoring Greece to investment grade.
In March 2025, Greece's government celebrated a significant milestone with Moody's credit rating agency upgrading its government bonds to investment grade. This upgrade to Baa3 is a notable improvement from the previous rating of Ba1. Initiated during a severe debt crisis 15 years prior, the long journey towards restoring Greece's credit status reflects considerable efforts in economic reform and fiscal management. Finance Minister Kostis Hatzidakis expressed that this upgrade symbolizes the end of a challenging period for Greece's economy and underscores the achievements of its citizens and government. Moody's attributed the positive rating change to various factors, including quicker improvement of public finances than anticipated, ongoing policy reforms, enhanced institutional governance, and a stable political environment. As Greece continues to maintain substantial primary surpluses, its high debt burden, which peaked above 200% of GDP in 2020, has been steadily decreasing and is projected to drop below 150% this year according to the Greek central bank. The credit upgrade was met with cautious optimism, especially coming amid widespread protests and strikes against the government's handling of recent crises. Prime Minister Kyriakos Mitsotakis highlighted this achievement as a reflection of Greece's substantial progress and reiterated the government’s commitment to reforms that facilitate investment and job creation. The decision by Moody's marks the last major ratings agency to elevate Greece's bonds, closing an arduous chapter of economic instability. In the context of Greece's past struggles, faced with three international bailouts and rigorous austerity measures following the financial crisis that erupted in 2010, this upgrade serves as a testament to the resilience of its economy and the efforts made to restore confidence among international investors. Lower borrowing costs and increased investment opportunities are expected to follow this rating upgrade, signaling a potential new era for Greece’s economic landscape.