(Bloomberg) -- S&P Global Ratings raised Greece’s sovereign credit outlook to positive from stable, just months after the company put the country back in the investment grade zone, a status lost in 2010.  

“The positive outlook reflects our expectation that the tight fiscal regime will continue to spur a reduction in the government debt ratio, while growth should continue to outperform that of Greece’s euro zone peers,” S&P said on Friday. Greece’s rating was affirmed at BBB- by the company. 

Rating companies except for Moody’s returned Greece to investment grade status in 2023 following Prime Minister’s Kyriakos Mitsotakis reelection. The premier had pledged to continue reforms and stick to fiscal discipline. 

The government sees the economy growing by 2.9% this year after economic growth expanded by 2% in 2023, outperforming most of its European peers, while the debt ratio is seen declining to 152.3% of gross domestic product in 2024 from a high of 206% in 2020. It has also promised to increase the budget’s primary balance  — an index that shows revenues minus spending excluding interest payments — to 2.1% of gross domestic product in 2024 from 1.1% last year. 

Greece has also moved fast with its divestment plan from the country’s lenders. Starting in October, it managed to fully exit from three big banks, while it plans to move forward with similar plans by year-end with its holding in National Bank of Greece. Banks are also ready to pay dividends for the first time since 2008, in a sign of the economy’s and sector’s return to normality. 

“Despite some recent softening in economic data, economic growth has outperformed the euro zone average, a trend we expect will continue,” S&P said. “We forecast growth will accelerate to 2.4% on average over 2024-2027.”

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