S&P and DBRS affirm Greek rating and outlook

Two of the world’s four main rating agencies, Standard & Poor’s and DBRS Morningstar, have affirmed their rating and outlook for Greece.

S&P on Friday forecast a 9% economic contraction for this year, in line with European Commission projections (compared to the latest government estimate for 8.2%), followed by a robust recovery in the next few years.

The agency affirmed its “BB-/B” rating for this country and its stable outlook, arguing that the government has sufficient fiscal reserves ahead of any complications caused by the pandemic in the economy and the budget, which support Greece’s solvency.

Interestingly, S&P said that in terms of maturity and average interest cost, Greece boasts one of the most advantageous debt profiles among the countries rated by the agency.

DBRS Morningstar, meanwhile, maintained its “BB (low)” rating and its “stable trend” for Greece on Friday, noting that the country’s sizable cash reserves provide it “with some fiscal capacity to help weather the impact of the crisis.”

It further found that while Covid-19 will slow the pace of bad-loan reduction by banks, the country’s supervisory measures will alleviate the pressure.