Standard and Poor's on Friday upgraded Greece's credit rating to "B-" from "CCC+" with a stable outlook, citing its progress in cutting costs and recapitalizing banks.
Greece is "broadly complying" with the terms of its 86 billion euro (roughly $92 billion) bailout deal financed by euro zone states, opening the possibility for broader debt relief, the ratings agency said. It noted that Greece's economy has "proved more resilient" than expected.
A possible agreement on pension reform later this year increases the chances of more relief, S&P said. It projects mostly flat growth for the Greek economy this year, followed by a "more robust" recovery.
Last year, Greece accepted the terms of the new bailout deal, which included austerity measures, after voters had rejected it in a referendum. The left-wing Syriza government, elected earlier in 2015, had campaigned against additional spending cuts.