Greece has achieved its fiscal targets for 2012, registering a small primary deficit despite the recession, Fitch rating agency noted on Tuesday, attributing the government’s success to the major curtailing of expenditure and the reduction of state debt through the PSI restructuring and the bond buyback.

The agency added that the reduction of the deficit and the improvement in the current account balance show that the Greek economy has entered a phase of stabilization.

Nevertheless, the implementation of reforms including privatizations and the restructuring of the banking sector constitute essential conditions for the country to enter a course of sustainable growth, Fitch says, estimating the economic contraction this year to come to 4 percent, against a government estimate of 4.5 percent.

The rating agency underscores that the country with the highest deficit in the eurozone has made the greatest fiscal adjustment ever recorded, although it still has some way to go before seeing its debt decrease.

The sustainability of the Greek debt remains particularly fragile, despite the haircut and the buyback, Fitch says.