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UPDATE 1-Moody's upgrades Greece to Ba3 from B1, outlook remains stable

(Adds finance minister’s statement)

ATHENS, Nov 6 (Reuters) - Credit rating agency Moody’s on Friday upgraded Greece’s local and foreign currency long-term issuer ratings to Ba3 from B1, saying the outlook of the country remained stable.

Moody’s said growth prospects over the coming years are positive, notwithstanding the negative near term impact of the coronavirus pandemic, particularly on the tourism sector.

Greece’s economy, it said, will benefit from efforts to improve the investment climate coupled with inflows of substantial European recovery funds.

Favourable growth prospects, combined with a return to a prudent fiscal stance, will lead to a gradual reversal in the public debt trend. In addition, Greece benefits from a very favourable debt structure and strong affordability, it said.

Moody’s said ongoing reforms support a sustainable improvement in institutional strength and have already brought tangible progress in areas including tax administration and compliance and the fight against corruption.

Greece’s economy contracted by about a quarter in a debt crisis which ravaged the country for about a decade, effectively locking it out of debt markets forcing it to seek three international bailouts between 2010 and 2015.

Greek Finance Minister Christos Staikouras welcomed the upgrade. “This is tangible proof of the elevated confidence towards the country and the government in administering the present (health) crisis, its reform initiatives and the potential of the Greek economy,” he said in a statement.

Reporting By Michele Kambas; editing by Grant McCool