Moody’s Upgrades Greece to Investment Grade, Ending Crisis Era

Greece has finally turned a page. Rating agency Moody’s announced that the country has regained investment-grade status, and upgraded the country to Baa3 from Ba1.

The upgrade marks a pivotal moment in the country’s economic recovery, as Moody’s was the last major rating agency recognized by the European Central Bank to restore Greece to investment-grade, completing the nation’s comeback from the depths of its economic crisis, when it was dramatically downgraded to ‘junk’ status.

The rating agency highlighted that “public finances have improved faster than anticipated,” citing Greece’s resilience, stable political environment, institutional advancements, and prudent fiscal policy as key drivers behind the upgrade.

Greece’s debt has fallen nearly 50 percentage points since 2020, reaching 156.1% of GDP by the end of 2024 and the country’s recent €3 billion bond issuance attracted record-high bids, reflecting growing investor confidence. Moody’s expects further debt reduction in the coming years.

Key factors contributing to the upgrade include public finance reforms, digital tax administration, targeted tax cuts, consistent primary surpluses, and the effective use of EU recovery funds, says Moody’s.

Commenting on the upgrade, outgoing Minister of National Economy and Finance Kostis Hatzidakis called the rating a historic milestone, signaling Greece’s return to economic ‘normalcy’. He emphasized that “The last five and a half years were not easy… This is not just a success for the government, but for all Greeks.”

Despite the upgrade, Moody’s cautioned that Greece still faces long-term challenges, particularly in completing institutional and structural reforms to sustain its economic progress.