Credit ratings agency Standard and Poor’s has upgraded its outlook on Greece to positive, citing improved policy predictability and economic prospects.
In a statement published late Friday, the agency said that this reflects a possible upgrade if the authorities unlock Greece’s growth potential by boosting competition in product markets, bolstering property rights, simplifying bankruptcy procedures and improving the enforcement of contracts.
“The positive outlook reflects our opinion that Greece’s policy predictability is improving, as are its economic prospects. During 2016 and 2017, the government ran primary fiscal surpluses while the multiyear recession ended last year. However, in our view growth policies rather than additional fiscal measures will be the key determinants of long-term debt sustainability for Greece. Over the next three years, we project real GDP growth of 2.0%-2.5%,” it said.
Standard and Poor’s highlighted that it sees potential for stronger outcomes if the government does more to improve the business environment so as to attract stronger investment inflows from abroad.
“Over the near term, there is room for optimism. We think planned increases to public spending on key infrastructure projects in transport, including ports and airports, could contribute to stronger growth by galvanizing private investments in Greece’s most competitive sectors including tourism, shipping, and logistics,” it said.