Fitch upgrades Greece by one notch to ‘ΒΒ-plus’

Fitch Ratings on Saturday raised Greece’s long-term sovereign credit rating to “BB-plus”, one notch below investment grade, citing stronger nominal growth, budget over-execution, and a favourable debt-servicing structure.

The agency said its outlook was “stable”.

“Fitch now expects better deficit and debt outturns and projections in 2022-2024, thanks to stronger nominal growth, budget over-execution and a favourable debt-servicing structure,” it said in a report.

This implies an improvement in the primary balance of 2.5 percentage points, to a surplus of 0.9% in 2024 and balanced position in 2023, Fitch added.

Greece lost its investment credit rating, which implies a low risk of default, in 2010 when its decade-long debt crisis erupted, forcing it to sign up to international bailouts worth about 260 billion euros up to 2015 to stay afloat.

It emerged from bailouts in 2018 and hopes to regain the investment grade within 2023.

Greece puts this year’s growth at 1.8%, from 5.6% in 2022. It expects to achieve a small primary surplus of 0.7% of gross domestic product after three years of primary deficits and sees its debt shrinking by 10 percentage points to 159% of GDP.

“We expect the debt ratio to fall at a more moderate pace over the medium term, driven largely by primary balance surpluses. At a projected 160.6% in 2024,” Fitch said.
Source: Reuters