UPDATE 1-Moody's -Greece on review for possible downgrade

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ATHENS Oct 29 (Reuters) - Moody's on Thursday placed Greece's A1 foreign and local currency rating on review for a possible downgrade, a week after Fitch Ratings downgraded the highly indebted country's rating.

The spread between 10-year Greek bonds and benchmark German bunds widened by 4 bps to 141 bps after Moody's said it might cut the rating over deteriorating fiscal data.

"The deterioration of the fiscal position raises serious questions about the sustainability of Greek public finances and the problem will be compounded by a less favourable global economic environment going forward," said Arnaud Mares, a Senior Vice President in Moody's Sovereign Risk Group.

The new Greek government told its EU partners last week the budget deficit would reach 12.5 percent of gross domestic product (GDP) this year, more than double than the previous, conservative government had predicted.

"The likelihood that Greece can 'grow' out of its government indebtedness post-crisis as it did pre-crisis is minimal," said Mares. (Reporting by Ingrid Melander; Editing by Chris Pizzey)