Fitch Lifts Greece’s Credit Rating Amid Better Fiscal Forecasts

Presidential guards perform their ceremonial duties in front of the Greek parliament building in Syntagma square, ahead of a debate on phone tapping, in Athens, Greece, on Friday, Aug. 26, 2022. The Greek government and the European Union should move faster on probes over surveillance of an opposition politician and a journalist, a senior European lawmaker said, as the scandal threatens further domestic turmoil. Photographer: Yorgos Karahalis/Bloomberg , Bloomberg

Maria Elena Vizcaino, Bloomberg News

Jan 29, 2023

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(Bloomberg) -- Fitch Ratings raised Greece’s credit score as it expects improved fiscal and debt outcomes for the nation through 2024. 

The company upgraded Greece by a notch to BB+, one level below investment grade, on par with Colombia and Morocco. Fitch expects the general government deficit to shrink to 1.8% of gross domestic product in 2024 from an estimated 3.8% in 2022, according to a statement issued on Friday. 

“There is some uncertainty around fiscal policies after the upcoming legislative elections but the risks are mitigated by a broad commitment to and a recent track record of fiscal prudence,” Fitch analysts Federico Barriga Salazar and Greg Kiss said in the report. 

Last year, Greece benefited from a “snowball effect” given decades-high nominal growth and a modest increase in average interest rate costs, leading to an estimated “record” narrowing of the general government debt/GDP ratio to 170%, they said, noting they expect that ratio to fall at a “more moderate pace over the medium term, driven largely by primary balance surpluses.”

S&P Global Ratings scores Greece as BB+, like Fitch, and Moody’s Investors Service rates it Ba3, three notches into junk. All three assign the nation a stable outlook. 

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