Immutable kept her Creditworthiness of the country the international rating agency Moody’sin the category Ba1which is one “step” below the investment tier.

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 in non-investment grade.

The rationale for the decision

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

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

As Moody’s estimates in upgrade of the economy could contribute to its continuation economic policy and the commitment to fiscal consolidation, combined with the successful implementation of the remaining reformsparticularly in the judicial system, that would lead to greater resilience to external shocks, a faster-than-expected improvement in fiscal soundness and the processing of non-performing loans, and support a higher rating.

In addition, a faster change in the economic structure of Greece that contributes to its improvement financial resilience would be positive for creditworthiness. Further improvements in the banking sectorreducing profitability volatility and bringing asset quality and capitalization ratios closer to the euro area average, would also be credit positive.

instead deterioration of its credit rating could result from a policy reversal seen in recent years or from indications that past reforms are not delivering 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.