Fitch upgrades Greece's credit rating to investment grade

The US ratings agency Fitch has upgraded Greece's sovereign debt rating to investment grade, praising the country's progress on reducing its elevated debt levels.

Fitch's decision to lift its rating for Greece's long-term debt from BBB- from BB+ follows in the footsteps of S&P Global Ratings, which returned the Mediterranean country to investment grade in October.

"Fitch expects general government debt/GDP to remain on a sharp downward trend, thanks to solid nominal growth, budget over-execution and a favourable debt-servicing structure," Fitch said in a statement announcing its decision.

It added that it expects Greece’s debt as a proportion of economic outlook to fall to 160.8 percent this year, and 141.2 percent by 2027 -- down sharply from 171.4 percent in 2022.

The Greek debt crisis was sparked by reckless state spending and misreporting of fiscal data to the European Union.

When revealed by the socialist government of George Papandreou in October 2009, it caused Greece's borrowing rates to rapidly spike beyond reach.

Greece endured eight years of austerity under three successive international bailouts -- worth a total of 289 billion euros ($306 billion) -- in a bid to save the country from collapsing under its debt mountain of some 300 billion euros.

The economic reforms demanded by Greece's creditors had a major impact, reducing gross domestic product (GDP) by a quarter over eight years and sending unemployment soaring to more than 27 percent.

Greece's finance minister, Kostis Hatzidakis, lauded Fitch's upgrade on Friday.

"The Greek economy's credit rating upgrade by Fitch Ratings marking its ascent to investment grade is an important national success!" he wrote in a post on X, formerly Twitter.

"The upgrade sets the stage for stronger investment inflows, improved financing conditions for the economy, growth and increased employment," he added.