15.6 C
New York
Tuesday, May 24, 2022

Debt deal a credit positive for Greece: Moody’s

Debt deal a credit positive for Greece: Moody's© Reuters. A Greek flag flutters atop the parliament building in Athens

ATHENS (Reuters) – A debt relief package offered to Greece by its creditors last week is credit positive for the overborrowed country, rating agency Moody’s said on Monday.

“We expect the agreement to pave the way for the government to return to capital market funding on a sustained basis, a credit positive,” it said in a report.

Euro zone finance ministers agreed debt relief for Greece on Friday, to smooth its return to market financing once it exits its bailout in August after eight years of living mainly on loans from the bloc.

Greece was offered a 10-year deferral and maturity extension on a large chunk of past loans as well as 15 billion euros in new credit.

Moody’s, which rates Greece at B3 positive, said the debt relief ensured the government would be facing “very moderate” refinancing needs for the next 10 years.

“We consider the package a significant benchmark in Greece’s ongoing recovery from its deep government debt, economic and banking crisis,” the agency said.

But it said Greece’s challenges remained significant as the agreement required a sustained commitment to prudent fiscal policy and a very large primary surplus for many years to come.

“Although economic growth has returned and will likely accelerate further this year, Greece’s growth outlook is rather moderate at 2.0-2.5 percent per year at best, unless there is a large boost to investment,” Moody’s said.

Debt relief has been an overarching objective of Prime Minister Alexis Tsipras since he swept to power in 2015. Greece has debt of almost 180 percent of gross domestic product, the highest in the 19-country euro zone.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

11,301FansLike
12,893FollowersFollow
751FollowersFollow
- Advertisement -

Latest Articles

Popular Articles