The road to regaining investment grade appears to be getting even longer for Greece, as the pandemic-driven economic crisis is freezing the credit rating upgrades the country need to emerge from so-called “junk status.”
Citigroup, which has just recently updated its recession forecast for this year to 7.1% from 6.9%, argues that the slump in Greek tourism means a return to investment grade is unlikely to happen in the next four years.
The good news for the country is that it is not expected to sustain any rating downgrades for the time being, thanks to high cash reserves, its steady presence in the markets, its positive debt profile thanks to the easing measures and the fact Greece will be among the member-states to benefit most from the European Union’s Next Generation package.
This is expected to be confirmed on Friday night by Fitch, which is likely to affirm its BB rating and its stable outlook for Greece. This is two notches below investment grade, roughly where Citigroup expects the country to stay in the next two to four years, according to its latest estimates.