ANKARA
International credit agency Fitch has downgraded Greece’s sovereign debt rating to 'CCC' from 'B', the agency said in a press release late on Friday.
The rating indicates increased concern of default on the country's public debt. “Developments in Greece warrant such a deviation from the calendar,” the agency said.
"High lack of market access, uncertain prospects of timely disbursement from official institutions, and tight liquidity conditions in the domestic banking sector have put extreme pressure on Greek government funding," the release said.
"The damage to investor, consumer, and depositor confidence has almost certainly derailed Greece's incipient economic recovery," the release said.
While Fitch expressly stated that it did not expect a Greek default, "heightened risk" made an early downgrade imperative.
Fitch was not set to review Greek public debt until May 15, so the early decision shows a sharp increase in the degree of concern.
Fitch also downgraded Greece's short-term foreign currency issuer default rating to 'C' from 'B,' and reduced the country's debt ceiling to 'B-' from 'BBB.'
"We have revised down our growth forecast significantly to 0.5 percent this year from 1.5 percent in January 2015 and 2.5 percent in December 2014, with risks to growth on the downside," the release said.
Greece is locked in intense negotiations with its European creditors for the continuation of its bailout. The creditors are currently reviewing a list of economic reform proposals and a decision on them is expected early this week.
Unless the next €7.2 billion ($7.8 billion) tranche of the bailout package is released shortly, Greece will run out of funds to run its banks and its public services by the end of April.
