Fitch: Stability Program underscores fiscal progress
Greece’s 2023 Stability Program highlights the strong improvement in public finances and outlines a substantial further reduction in debt, Fitch Ratings said in a report, adding that even if some of the program’s projections proved to be optimistic, they reinforce our view that the debt ratio will continue to fall over the medium term.
In a report, Fitch said the Stability Program submitted to the European Commission in April projects an increase in real GDP this year of 2.3%, down from 5.9% last year but stronger than the 0.8% Fitch forecasts for the eurozone in 2023. It estimates the 2023 headline and primary budget balances at -1.8% and 1.1% of GDP, respectively, from -2.3% and 0.1% in 2022.
Continued economic expansion, supported by investment and higher exports, will help sustain primary surpluses, which will reach 2.5% of GDP in 2026, according to the program.
“Fitch’s upgrade of Greece’s sovereign rating to BB+/Stable in January reflected our expectation of better deficit and debt outturns and projections in 2022-2024, thanks to stronger nominal growth, budget underexecution and a favorable debt-servicing structure. The 2022 outturns reported in the Stability Program were even better than Fitch’s estimates, with headline and primary balances beating expectations stated in our March Sovereign Data Comparator by more than one percentage point,” the credit rating agency said in the report.
