Fitch puts Greece near rating target
Fitch Ratings upgraded Greece’s credit rating to BB+ with a stable outlook on Friday, taking it to within one step of investment grade.
The upgrade reflects the country’s improved fiscal outlook, reduced risks in the banking sector, structural momentum, macroeconomic outlook and the acquired speed of reforms, deceleration of inflation and stable funding costs.
Fitch now expects better deficit and debt results and improved forecasts for 2022-24, thanks to stronger nominal growth and a favorable debt service structure.
It projects a further reduction in the general government deficit to 1.8% of gross domestic product in 2024 from an estimated 3.8% in 2022. This implies a surplus of 0.9% in 2024 (and a balanced position in 2023). The agency certainly highlights some uncertainty surrounding fiscal policies following the upcoming parliamentary elections, but the risks are mitigated by broad commitment and a recent record of fiscal prudence.
Finance Minister Christos Staikouras stated immediately after the report’s issue that the credit rating upgrade by Fitch Ratings “confirms that the national goal of reaching investment grade by 2023 – with multiple benefits for society and the economy – is possible.”
