ECONOMY

Moody’s upgrades Greece, but sees recession in 2014

Moody’s upgraded Greece’s credit rating two notches late on Friday and has maintained its stable outlook for the Greek economy, which means it does not consider a downgrade likely in the near future. However it does expect the recession to continue in 2014.

The international rating agency lifted Greece from C to Caa3 – still in junk territory though – after the close of the New York Stock Exchange, citing the improvement of the country’s economic prospects in recent months. The better macroeconomic figures with a smaller economic contraction than expected and this year’s anticipated primary surplus contributed to the firm’s decision.

This is set to ease the pressure on the local market today expected due to the postponement of the troika inspectors’ return to Athens and the subsequent delay in reaching an agreement on reforms.

Still, Moody’s predicts the economic contraction will continue for a seventh year in 2014, with the economy shrinking 0.5 percent against a government forecast for a 0.6 percent recovery. Moody’s says the economy will rebound by 1 percent in 2015, led by exports and tourism.