Moody’s, the international rating agency, has upgraded Greece by two notches, reflecting good progress with fiscal consolidation despite continued recession and fragile political stability.
The upgrade from Caa3 to single C with a stable rating still leaves Greek sovereign bonds deep in junk territory, but supports the coalition government’s forecast of a primary budget surplus this year before debt repayments, rising to 1.5 per cent of output in 2014.
“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 programme,” the agency said.
A senior finance ministry official said on Friday that on the basis of 10-month revenue figures, Greece could achieve a primary surplus of close to €1bn this year.
An improved medium-term outlook and lower interest payments following last year’s restructuring of privately held Greek debt also contributed to the upgrade, Moody’s said.
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