UPDATE 2-Moody's -Greece on review for possible downgrade

* Moody's puts Greece on review, a week after Fitch cut

* Cites worsening fiscal data, concerns over statistics

* Analysts expect cut to follow

ATHENS, Oct 29 - Moody's on Thursday placed Greece's A1 debt rating on review for a possible downgrade, citing a sharp deterioration in the highly indebted country's fiscal data, a week after Fitch cut its rating.

The new Greek socialist 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 what the previous, conservative government had predicted.

"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 likelihood that Greece can 'grow' out of its government indebtedness post-crisis as it did pre-crisis is minimal."

After Moody's announcement the spread between 10-year Greek bonds and benchmark German bunds widened to about 144 bps from 136 bps in late European trade a day earlier.

Analysts said they were not surprised by the move and expected a rating cut to follow. Moody's said in the statement it intends to complete its review within 3 months, in line with its usual practice.

"I'd be very surprised if they don't downgrade the rating after saying that they see 'minimal likelihood Greece can grow out of its government indebtedness'," said Diego Iscaro, at IHS Global Insight.

"The issue of the reliability of the Greek statistical data is not new and introduces a high level of uncertainty to developments in the economy. And uncertainty is something the government doesn't really need at the moment," he said.

Moody's also cut the outlook on Portugal's Aa2 ratings to negative from stable citing structural economic challenges, rising debt and the government's slow tackling of the problems.

The combination of fiscal troubles, a ballooning public debt and slow structural reforms have long kept Greece the lowest rated country in the euro zone.

Fitch Ratings last week downgraded Greece's debt to A- with a negative outlook, the first major agency to chastise the euro zone weakling for slumping finances since the Socialists came to power on Oct. 4.

Standard & Poor's cut Greece's sovereign rating one notch to A- in January with a stable outlook, citing a loss in economic competitiveness due to high wage inflation and the persistently high budget deficit.