Fitch raises GDP estimate to 6% growth
The strong increase in Greece’s gross domestic product in the first half of the year has led Fitch to upgrade its growth estimate for this year to 6%, from 4.3% previously, stressing that the Greek economy has already reverted to pre-pandemic levels.
Nevertheless, the rating agency warns that the fiscal deficit this year will be higher than anticipated due to the increased cost of the support measures. It does estimate however that the debt-to-GDP index will as of this year enter a declining course, which constitutes a decisive factor for the agency to upgrade the country’s rating.
Still, Fitch reduced its growth projection for 2022 from 5.3% to 4%.
Fitch’s next scheduled rating report on the Greek economy is expected in mid-January 2022, but the agency has already indicated its likely direction: Its rating is “BB” (with a stable outlook) – i.e. two notches below investment grade, and stresses that if there is any greater confidence that the debt/GDP ratio will return to a steady course of decline and the improvement of banks’ assets continues, there could be a favorable effect on the country’s credit rating.
