The credit rating agency Moody’s upgraded the outlook for Greece’s debt to positive from stable, confirming the debt at the Ba3 level.

The key drivers for the outlook upgrade, the house said in a statement, are the prospects for a period of higher nominal GDP growth than in the past decade, partly as a result of improvements in governance and effective reforms in the economy and banking sector, which bear fruit more clearly.

Coupled with inflation, which is forecast to be at limited but positive levels, once the current energy price shock subsides Moody’s estimates nominal GDP growth of around 4-6% in the coming years compared to below 2% and often negative growth rates in the previous decade.

Moody’s forecasts that the better-than-feared energy situation in Europe will support growth in Greece, which will rise to 1.8% in 2023 and 2024, driven mainly by robust consumption and continued strong increase in investment.

Together with the continued commitment to sound fiscal indicators supported by the implementation of fiscal measures, higher nominal GDP growth will contribute to a significant reduction in the Greek debt burden in the coming years.

The confirmation of the Ba3 rating reflects a balance between improvements in several areas of Greece’s credit profile with ongoing difficulties. In particular, further reforms in the areas of justice, education, business environment and labor markets would support a higher rating.

In addition, Moody’s notes, the public debt burden remains very high and is supported by official creditors, with future improvements and a full return to market financing implying the maintenance of high primary surpluses in the coming years.