Credit rating agency Moody’s upgraded the Greek banking system this week from negative to stable, and said the country’s economy would return to growth this year after a six-year recession.
“The outlook for the Greek banking system has been changed to stable from negative, reflecting expectations of a return to growth of the domestic economy in 2014-15 after six years of contraction,” the agency said in a note.
It added that the Greek economy will register real GDP growth of 0.3 per cent in 2014 and 1.2 per cent in 2015.
The agency said that “structural reforms are progressively transforming Greece into a more competitive export-oriented economy from a consumer-led growth model.”
Greek banks in recent weeks have succeeded in raising fresh private capital after a damaging rollover of state debt in 2012.
Furthermore, the government hopes to begin debt relief talks soon with its EU-IMF creditors after achieving a primary surplus last year.
EU data agency Eurostat last week confirmed that Athens had achieved a 2013 primary budget surplus – the balance before interest and stripping out bank support and other payments – equal to 0.8 per cent of GDP.
In early April, Greece returned to medium-term international bond markets for the first time in four years.
However, Greek bonds still carry junk status, more than 25 per cent of the workforce is unemployeed, and the country is still left with a debt equal to 175 per cent of GDP, according to Eurostat.