BUSINESS

Fitch offers Greece no upgrade, only kind words

TAGS: Finance, Markets

Despite expectations for an upgrade, Fitch maintained Greece’s sovereign credit rating at BB- late on Friday, and the Greek economy’s outlook as “stable.” Greece thus remains three notches below investment grade, according to Fitch, whose rating for the country is higher than those of peers Moody’s and Standard & Poor’s.

The rating agency noted that Greece’s huge debt stock and weak growth prospects over the medium term, as well as the very high level of nonperforming loans in its banking system, are offset by the high per capita income, which by far exceeds the average in countries with BB- and BBB ratings.

“While Greece’s financial crisis exposed shortcomings in government effectiveness and put acute pressures on political and social stability, governance is still significantly stronger than in most sub-investment-grade peers,” Fitch said in a statement, also noting the decline in the unemployment rate.

Greece, the agency argued, has also made inroads in the bonds market with the five-year issue on January 30, and estimated that the country could fully cover its financing needs up to 2022, offering a significant safety net against any funding risks for a long period; that should support market confidence and access now that the bailout program has been completed, said Fitch.

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