LONDON, Nov 17 (AFP) - Credit rating agency Standard and Poor's Ratings Services said Wednesday it had cut its rating on Greece's debt due to concerns about the country's management of its public finances.
S and P said in a statement it had lowered its long-term sovereign credit ratings on Greece to A, from A-plus previously.
"The downgrade reflects the lack of a resolute strategy to achieve rapid and lasting improvements to the general government primary balance, and to initiate a significant and sustained decrease of the public debt ratio," S and P said.
The credit rating agency left unchanged its A-1 short-term ratings on the country and said the outlook for further changes to Greece's ratings was stable.
Recent statistical revisions of Greece's financial data revealed that its public deficit was above three percent of output as far back as 1997, contradicting earlier figures that showed it well within eurozone limits since 1999.
Greece's public deficit for 2004 is expected to hit 5.3 percent of gross domestic product, well beyond the eurozone limit of three percent.
Greek Economy and Finance Minister George Alogoskoufis has pledged to bring it down to 2.8 percent in 2005.
In reaction to S and P's decision, the finance ministry said in a statement: "The government has already presented in the 2005 budget bill an adaption program for the public finances that aims to quickly re-establish the financial balance, reduce debt and reinforce growth and employment".
It said that the deficit would be brought down by lower spending and debt reduced thanks to privatisations.
S and P had assigned a negative outlook to the rating in September, a day after substantial revisions to Greek fiscal data were made public, and the agency stated that failure to address the increased fiscal imbalances with lasting structural measures would lead to a lowering of the ratings.
S and P forecast a public deficit of 5.5 percent of GDP and public debt of 112 percent of GDP for this year.
"The pressure on Greek public finances will remain, but we project that the public debt ratio will post marginal declines in the medium term," S and P credit analyst Trevor Cullinan said.
The government's aim to reduce its deficit to less than three percent of GDP in 2005 would be difficult to attain without additional measures or increased recourse to one-off transactions, he added.
11/17/2004 18:17 GMT - AFP