DBRS Morningstar said in a statement on Wednesday that it views Greece’s commitment to fiscal discipline positively; however, the implications of Russia’s invasion of Ukraine add to the uncertainty surrounding the projections on Greece’s fiscal and debt targets for the period 2023-25.
A longer-lasting impact on commodity prices and inflation could result in lower growth and additional measures may be needed to mitigate the impact on businesses and households, the rating agency said.
A prolonged or broader conflict could intensify the pre-existing impacts of the pandemic, result in weaker growth, and further delay the rebalancing of fiscal accounts.
Despite the absence of strong economic ties with Russia, Greece’s economic growth is set to decelerate this year to 3.1% according to the Stability Program, from initial estimates of 4.5%.
This is mainly due to increased commodity prices and the negative impact of high inflation, the Canada-based company argued.