DBRS upgrades Greece to ‘BB high’ from ‘BB’, outlook stable

© Reuters. FILE PHOTO: People sit in a cafe in central Athens, Greece, September 3, 2020. REUTERS/Alkis Konstantinidis

ATHENS (Reuters) – Ratings agency DBRS Morningstar upgraded Greece’s long-term issuer rating to ‘BB high’ from BB and changed the trend to stable from positive, it said on Friday.

It also upgraded Greece’s short-term foreign and local currency issuer ratings to R-3 from R-4 and changed the outlook to stable from positive.

The upgrades reflect the rating agency’s view that Greece continues to progress economic reforms, remaining fully committed to fiscal consolidation.

“The economy grew by 8.3% last year and is now very close to its pre-pandemic level. Fiscal overperformance and cash management strategy led to liquid cash reserves remaining very high, currently around 41 billion euros ($45.33 billion),” it said.

DBRS said Russia’s invasion of Ukraine looks set to shave off around one percentage point from this year’s GDP growth.

“The ECB last December signaled its support to Greek government bonds. Greek banks continue to make significant progress in reducing non-performing loans to single digits, even with some new asset quality deterioration,” it said.

Greece’s Finance Minister Christos Staikouras welcomed the move.

“The country’s economy made another significant step amidst successive exogenous crises. DBRS Morningstar upgraded Greece by one notch, bringing it one step before investment grade,” he said.

($1 = 0.9046 euros)