Ratings agency Moody's late has upgraded Greece's credit rating, citing improved results in the crisis-hit country's economic adjustment program.

The agency on Friday announced the two-notch upgrade from C to Caa3 - still well below investment grade - in a move seen as a boost for the government that has promised to end a crippling recession and return to international markets next year.

The news was announced hours after the government said talks with bailout out creditors had hit snags, pushing back negotiations on cost-cutting reforms for at least a week.

Greece is on course to balance its budget before interest payment this year, meeting a central demand by rescue lenders who have kept the country afloat since it lost market access in 2010.

"Based on the government's budget execution record up until October, Moody's believes that the government's deficit target is likely to be within reach," the agency said.

A series of ratings agency downgrades marked the start of the Greek financial crisis, which ultimately led to the country's 240 billion euro ($327b) bailout programs from the other eurozone countries and the International Monetary Fund.

There was no immediate reaction to Friday's news from the government.