18 Feb 2012

Iceland safe to invest in again - Fitch

9:01 am on 18 February 2012

Iceland is safe to invest in again, according to Fitch, which has upgraded its credit rating for the country three years after its economy spectacularly collapsed.

Fitch on Friday raised Iceland's sovereign rating to BBB- from BB+, meaning that the country's debt is now "investment grade".

The BBC reports Iceland's economy imploded under a mountain of debt in 2008, when three banks failed. At one point, their total foreign debt was larger than the Icelandic economy.

A bailout by the International Monetary Fund was required.

Fitch said the decision reflects the progress that has been in ''restoring macroeconomic stability, pushing ahead with structural reform and rebuilding sovereign creditworthiness".

Iceland left the IMF bailout programme last year.

Finance Minister Steingrimur Sigfusson told the BBC that the country's size has been crucial in the move towards recovery:

''You are quicker turning a small boat around than a big ship,'' he said.