DBRS raises Greece’s outlook to ‘Positive’
Morningstar DBRS raised on Friday night its outlook of the Greek economy from Stable to Positive, while affirming the country’s credit rating as BBB (low), i.e. investment grade.
The Canada-based rating agency, that the European Central Bank also takes into account when considering a country’s overall rating, said in a statement that the change in the outlook reflects its “expectations of further improvement in the banking system fundamentals. The banking sector is likely to continue maintaining good profitability, reducing nonperforming loans, and lowering deferred tax credits. Legacies related to a strong nexus with the government have also receded as a result of the government decision to sell a large amount of stakes in systemic banks.”
It added that “healthy and rising primary surpluses, in tandem with sound nominal growth, will facilitate further significant reduction in the public debt-to-GDP, which is expected to fall to below 140% by 2027 from 161.9% in 2023.”
“In addition, the implementation of structural reforms remains on good track, which, along with higher investments supported by European Union resources, should raise GDP potential and make the country’s growth more self-sustained. Since 2021, Greece has been outperforming euro area average growth, and this is likely to continue over the next two years. GDP is expected to expand by more than 2.0% in both 2024 and 2025,” the rating agency argued.
Greeting the news, National Economy and Finance Minister Kostis Hatzidakis stated that “this is yet another positive development for the Greek economy,” that underscores “the correctness of our economic policy which relies on fiscal responsibility, investment-friendly action and has got tangible results for citizens and businesses. This is another reason for us to accelerate the effort with the same policy mix in order to take Greek even higher.”
On Friday, September 13, Moody’s will also issue its new report on Greece’s sovereign credit rating.
