Friday, September 12, 2014

S&P upgrades Greece

Link:


On Sept. 12, 2014, Standard & Poor's Ratings Services raised its long-term foreign and local currency sovereign credit ratings on the Hellenic Republic (Greece) to 'B' from 'B-'. At the same time, we affirmed the short-term sovereign credit ratings at 'B'. The outlook is stable.


The upgrade reflects our view that risks to fiscal consolidation in Greece have abated. We forecast that, from next year, the Greek economy will emerge from seven consecutive years of negative growth. We expect recovering real and nominal GDP will enable Greece to operate average primary surpluses of 2% of GDP during 2014-2017. This is less than the 4.5% of GDP target the government envisioned in its program with the European Union (EU), the European Central Bank (ECB), and the IMF (together, the "Troika"), but we believe the lower estimate is politically more feasible than the government's target and consistent with a modest decline in government debt as a share of GDP.


Things continue to get better, albeit at a slow pace. That is fine as I am looking for positive change at the margin in order for a revaluation of my Greek bank plays.

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