Moody’s, the international rating agency, kept the country’s credit rating unchanged, in the Ba1 category, which is one step below investment grade.

At the same time, it kept the economic outlook unchanged (stable outlook).

It is noted that Moody’s remains the only rating agency that maintains the country’s credit rating at non-investment grade.

Moody’s in its announcement states that the challenges facing the Greek economy include the large current account deficit. Furthermore, given the size and importance of sectors such as tourism and shipping, the economy is vulnerable to external shocks and further improvements in economic resilience through a broadening of the export base will take time.

As Moody’s estimates, the continuation of the economic policy and the commitment to fiscal consolidation could contribute to the upgrading of the economy, in combination with the successful implementation of the remaining reforms, especially in the judicial system, which would lead to greater resistance to external shocks, faster from the expected improvement in fiscal soundness and the treatment of non-performing loans and would support a higher rating. In addition, a faster change in Greece’s economic structure that helps improve economic resilience would be positive for creditworthiness. Further improvements in the banking sector, reducing profitability volatility and bringing asset quality and capitalization ratios closer to the euro area average, would also be credit positive.

Conversely, a deterioration in its creditworthiness could result from a policy reversal observed in recent years or from indications that past reforms are not yielding the expected boost to the country’s growth and fiscal position, weighing on the business climate and investment.

In particular, indications that a sustained, substantial deterioration in the general government’s fiscal position is likely, possibly coupled with a sharp deterioration in the health of the banking sector, would trigger a negative rating action. An escalation of the geopolitical situation in Europe involving NATO would also likely lead to downward pressure on the rating.

Regarding today’s decision to keep both the credit rating and the outlook of the Greek economy unchanged during the current assessment, the international house states that it is based on a solid history of reforms, which has led to visible improvements of the institutions and governance, stronger investment and a healthier banking sector.

However, despite the expected large reduction, the debt-to-GDP ratio will remain very high. That said, the favorable debt structure and large cash reserve are important counterbalances. The Greek economy has withstood the energy crisis satisfactorily and the important funds of the European Union (EU, stable Aaa) as well as private investments will support growth in the coming years. Together with continued reforms this will help lift potential growth and offset to some extent the negative effects of adverse demographics.