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Moody's boosts Greece credit rating after fiscal progress

The agency moved Greece two places from from C to Caa3, citing improved results after the southern European country's tough austerity program.

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Moody's credit rating agency moved Greece up two places from from C to Caa3 on Friday. (Emmanuel Dunand/AFP/Getty Images)

Greece's financial outlook got a boost over the weekend as credit agency Moody's increased the embattled country's rating.

The agency moved Greece two places from from C to Caa3, citing improved results from the southern European country's tough austerity program.

“The Greek economy is bottoming out after nearly six years of recession,” Moody’s said in the statement.

“Based on the government’s budget execution record up until October, Moody’s believes that the government’s deficit target is likely to be within reach," it added.

Moody's is expecting Greece to save more rather than cut, after it pledged to the so-called 'troika' to show a budget surplus in 2014. Greece's budget surplus is expected to be 1.5 percent of GDP next year.

Caa3 is still considered below investment grade but the improvement is still a good sign for a government, which has promised to make Greece more competitive on international markets.

Despite the good news, the revised credit rating came during difficult negotiations between Greece and its creditors.

More from GlobalPost: Greece sees rebound after strong tourism season

Roadblocks in the talks meant that negotiations over austerity measures would be pushed back more than a week.

Some of the sticking points include removing a moratorium on home foreclosures, getting a new property tax through Parliament, solutions for next year’s fiscal gap, allowing mass dismissals and determining a future for arms-maker Hellenic Defense Systems (EAS), according to Kathimerini.

Loans from the European Central Bank and the International Monetary Fund (IMF) have kept Greece solvent since its economy collapsed in 2010, along with its ability to borrow on international markets.

Greece's economic catastrophe was marked by a series of credit ratings agencies' downgrades.

Greece has since been propped up by a loan program worth 240 billion euros ($327 billion).

Economic growth is expected to return to Greece in 2015 after years of GDP decline.

http://www.globalpost.com/dispatch/news/business/debt-crisis/131201/moodys-boosts-greece-credit-rating-after-fiscal-progress