Today, Moody’s is in the spotlight and the possibility of improving Greece’s credit rating and including Greek debt in investment grade status, as it will publish its report on the Greek economy. The American house is the only one that maintains Greek debt one notch below investment grade, at Ba1 with a stable outlook for one year.
In its March assessment, Moody’s confirmed the sustainability of Greece’s debt due to its favorable profile and the state’s high cash reserves, although the debt-to-GDP ratio remains very high. The firm had also endorsed the economy’s upward trajectory, forecasting growth of 2.4% for this year and 2.3% for 2025.
He also stressed that EU funds and private investments, together with continued reforms, will contribute to increasing potential growth and, to some extent, offset the negative effects of unfavourable demographics.
The verdict of the… Japanese
A few days ago, on Monday 9 September, the Japanese rating agency R&I confirmed the rating of the Greek economy at BBB- with a stable outlook. As it points out, an upgrade could be considered once the agency has received clear signals that the improvement recorded both at the fiscal and financial levels will be sustained.
According to the house, the Greek economy is recording stable performances. As of 2021, the Greek economy is growing at a rate that exceeds the average among the eurozone countries. In 2023, GDP increased by 2%. “In addition to the steady trend in private consumption supported by the improvement in the labor market environment, the country recorded a significant increase in investment thanks to the acceleration of foreign direct investment flows… Exports increased year after year due to the increase in tourism demand. As for 2024, the economy maintained a growth trend similar to that of the previous year, with the government forecasting real GDP growth of 2.5%, while the European Commission estimates it at 2.2%.
In terms of tax revenues, according to the house, these registered an upward movement throughout 2023, as a result of the economic recovery and the improvement of the working environment, the penetration of electronic transactions and the strengthening of measures against tax evasion. “The government continues its efforts to improve the efficiency of tax collection.”
At 152.7% the debt this year
Referring to public debt, it highlights that according to the government, it is estimated that in 2024 it will decrease to 152.7%. “Given the limited burden of interest payments and the adequate level of cash reserves, I&I believes that the government has some capacity to pay debt service.”
It should be recalled that, on September 6, the Canadian rating agency DBRS updated the outlook for the Greek economy from stable to positive, considering that the Greek government maintained its commitments in terms of both fiscal and reforms.