Fitch Ratings upgraded Greece’s long-term foreign-currency issuer default ratings to B- from CCC, citing reduced political risk and sustained GDP growth. Fitch said on Friday it expected the general government debt to steadily improve, cushioned by benefits from the European Stability Mechanism (ESM) program. Eurozone governments in June threw Greece another 11th-hour credit lifeline and sketched new detail on possible debt relief.
The Fitch upgrade comes after Moody’s upgraded Greece’s long-term issuer rating to Caa2 in June saying that it expected to see growth in the Greek economy. Fitch noted that its confidence in the Greek banking sector remained fragile, although it was improving. “A key challenge for the banking sector is tackling nonperforming exposures (NPEs), which remain stubbornly high at 45 percent of gross loans,” Fitch said on Friday.
Fitch maintained its positive outlook on the European country and said the risk of any future government reversing policy measures adopted under the European Stability Mechanism program is limited. [Reuters]