ATHENS, Greece (AP) — Greece’s economy received a substantial vote of confidence late Friday from Moody’s ratings agency, which upgraded the Greek credit rating by two notches but stopped just short of returning the formerly struggling country to formal financial respectability.

Moody’s said it was upgrading Greece’s rating from Ba3 to Ba1, with a stable outlook. But that still leaves the country’s bonds one notch shy of investment grade, which would clear the way for purchases by many major global investors.

Finance Minister Kostis Hatzidakis said the upgrade was “mainly a proof that the government must remain faithful to a sober fiscal policy,” to be combined with “sensitivity” on social issues.

The last time Moody’s upgraded Greece’s rating was in November 2020. It had downgraded the country’s bonds to non-investment, or junk, status in 2010, at the height of the financial crisis that forced three international bailouts in return for severe spending cuts, tax hikes and economic reforms.

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Moody’s announcement Friday came a week after DBRS Morningstar upgraded Greece’s rating to investment grade. DBRS, Moody’s, Standard and Poor’s and Fitch are the four ratings agencies taken into account by the European Central Bank — with the latter two expected to recalibrate Greece’s sub-investment grade rating by the end of the year.

Moody’s said the center-right government’s parliamentary majority following June elections “provides a high degree of political and policy certainty for the coming four years, fostering the ongoing implementation of past reforms and the design of further structural reforms.”

It said it expects Greece’s GDP to grow an average 2.2% annually in 2023-27 driven by investment and consumption, a “very significant improvement” compared to average growth of 0.8% in the five years before the pandemic.

It said Greece’s debt will likely fall to close to 150% of GDP as early as 2024 due to stronger GDP growth than projected earlier.

Moody’s said it sees the Greek government’s commitment to reform implementation and fiscally prudent policies as “credible and strong,” adding that there is also “broad consensus in society for these policies.”

But Moody’s warned that Greece’s economy is susceptible to external shocks, given the size and importance of key sectors like tourism and shipping.

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