Further credit rating upgrades not coming anytime soon

The story of Greece’s successive upgrades, which began 7 years agone and accelerated aft 2020, is present over. This does not mean that there will not beryllium immoderate more, but they will beryllium very slow and necessitate important effort connected the fiscal and betterment fronts.

This is what analysts from standing agencies who spoke to Kathimerini say, sending a wide connection that convergence with the ratings of different Southern countries, such arsenic Spain and Portugal, which person returned to the A category, is simply a substance of respective much years, a view shared by economists astatine Greek systemic banks.

From the class of C and junk status, where it had been since 2011 and remained until 2017, Greece climbed the standing ladder rather quickly, reaching concern people from 2023 and climbing 1 notch supra it successful 2024, based connected the standing of three of the 5 large standing agencies (Scope Ratings, Morningstar DBRS, S&P). Moody’s and Fitch springiness it a debased concern grade.

Although Greece has recovered two thirds of the losses successful its standing caused by the multi-year crisis, the persistently precocious existent relationship deficit, the attraction of strong maturation beyond the expiration of the Recovery Fund and, supra all, the people of the indebtedness are expected to find the speed with which it will beryllium capable to instrumentality to the A standing class it had astir 16 years ago.

As Samuel Tillery, S&P’s main expert for Greece, points retired to Kathimerini, further upgrades would necessitate greater advancement successful improving vulnerabilities: “Compared to A class countries, we spot that there are two main limitations to Greece’s recognition profile. First, the precocious and prolonged existent relationship shortage indicates a much exposed outer position, owed besides to the precocious dependence connected imports. The standing is besides affected by the still-high level of outer debt, a ample portion of which is public,” helium explains. It is noted that S&P’s adjacent standing for Greece is connected October 17. 

Despite their improvement, the cardinal macroeconomic elements of the Greek system are importantly antithetic from those of A rated economies, notes Ilias Lekkos, caput of economical investigation astatine Piraeus Bank, to Kathimerini. “Further upgrades will necessitate much clip and an adjacent greater betterment successful the representation of the Greek economy, particularly successful terms of the debt-to-GDP ratio,” helium adds.

Nikos Magginas, main economist astatine the National Bank of Greece, estimates that there is an anticipation of an upgrade by an further 1 to two notches successful the adjacent mates of years, based connected the comparative pricing of Greek authorities bonds. “However, adjacent then we will beryllium two to three notches distant from the historical highs of 2004 (with the state remaining successful the broader A class until 2009),” helium tells Kathimerini.