DBRS Morningstar, a credit rating company from Canada, upgraded Greece’s credit rating at the beginning of September to “investment level.”
DBRS Morningstar Rating
DBRS Morningstar is one of the world’s four major credit rating agencies, and it is the first to give Greece an investment-grade rating since 2010. They upgraded the rating of Greece from BB (high) to BBB (low), which is the minimum rating to be considered investment grade. DBRS Morningstar notes that the rating “reflects co-operation with the European Union and the euro system institutions.”
This is big news for the Greek economy because for a long time, the country did not have the confidence of rating agencies, because of Greece’s past financial crisis and bailouts with the European Union.
Top Ratings Companies
Earlier this year, Japan’s R&I and Germany’s Scope Ratings (2 other ratings companies) also gave Greece an investment grade rating, but they are not one of the big four agencies which the European Central Bank uses to consider the rating of a country’s bond.
The next decision came on Friday, September 15th, when Moody’s (another big rating agency) upgraded Greece’s rating from Ba3 to Ba1. While Ba1 is still below investment grade, the change shows increased confidence in the Greek economy. Standard & Poor’s and Fitch Ratings (2 other ratings agencies) will give their own decisions later this year, and they both have Greece one step from investment grade.
What “Investment Grade” Means for Greece
According to a report in the Financial Times, the Chief Economic Advisor to Greece’s Prime Minister says, “Greece’s upgrade to investment grade is like a seal of approval, firmly putting the crisis years behind us.” He adds, “We will work hard to live up to and exceed these new expectations.”
Since the bailout program ended in 2018, Greece has brought down significantly its debt as a proportion of gross domestic product in 2022. In the second quarter of 2023, Greece had the second-fastest GDP growth out of all European Union member nations.
