ATHENS: Greek Prime Minister Kyriakos Mitsotakis on Saturday hailed his country’s credit rating upgrade by Moody’s as a result of “significant” economic progress. During a decade of economic crisis between 2008 and 2018, public debt and deficit exploded leading to soaring interest rates and ratings agencies progressively downgraded Greece’s credit rating.

With Athens on the brink of default, the Greek government got emergency loans totalling 289 billion euros from the European Union, World Bank and International Monetary Fund. In exchange, the so-called “troika” demanded across-the-board reforms including deep state spending and salary cuts, tax hikes, privatizations and other sweeping measures.

The economy contracted by more than a quarter, unemployment spiked to almost 28 percent and skilled professionals emigrated in droves. But Moody’s on Friday upgraded Greece’s credit rating, pulling the country out of junk territory. “Moody’s upgrade of Greece to Baa3 marks the final step in restoring our investment grade by all major rating agencies, highlighting Greece’s significant progress,” Mitsotakis said on X.

Along with the ratings elevation from Ba1 to Baa3, Moody’s changed its outlook for Greece from positive to stable. The other two major ratings agencies, S&P and Fitch, elevated Greece out of junk territory last year for the first time since 2010.

“The upgrade reflects our view that Greece’s sovereign credit profile now has greater resilience to potential future shocks. The public finances have improved more quickly than we had expected,” Moody’s Ratings said in a statement. “Based on the government’s policy stance, institutional improvements that are bearing fruit, and a stable political environment, we expect Greece to continue to run substantial primary surpluses which will steadily decrease its high debt burden.”

Greece has registered improved economic growth in recent years (5.6 percent in 2022, 2.0 percent in 2023, and 2.3 percent in 2024) and is expecting 2.5 percent GDP growth this year, according to the country’s central bank. But Greeks are still contending with high food prices and low salaries. — AFP