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20 November, 1998
The Standard and Poors credit rating agency is expected to go ahead with a reassessment of the Greek economy and may upgrade its credit rating by the end of the year. According to reports, the finance ministry has forwarded a relevant request to the firm. A similar move is also expected by Moody's.
The reports said that contacts between finance ministry officials and S&P executives, the latter ascertained considerable progress achieved in the Greek economy's main indicators. In the government's view, what is the most possible is that the international credit rating agency will upgrade Greece's credit rating.
According to the latest evaluation by Standard and Poors, Greece's foreign currency debt has been listed in the "BBB-" category.
A S&P executive told Reuters that the firm recognizes positive developments achieved in the Greek economy. He conceded that the decision on the country's credit rating must be expected by the end of the year. Referring to the country's weak points, the S&P representative mentioned the slippage in the implementation of structural reforms, the high public debt- to- GDP ratio and the big budget deficit.
In the light of new developments, Greece's credit rating is expected to be upgraded to the "BBB" category, or even higher to the "BBB+" category. However, in both cases the upgrading of the country's credit rating is expected to lead to the rekindling of interest on the part of foreign investors. Apart from the positive effects in the Greek market from such a development, the Greek public sector also stands to benefit considerably.
The upgrading of the country's credit rating, as has been the case in the past, is expected to contribute decisively towards a decline in drachma interest rates. In this way, the cost of servicing the public debt decreases. At the same time, more favorable conditions are created for paying off the foreign debt, since the Greek public sector will be able to receive loans from international money markets at a lower cost.
Source: Athens News Agency