The DBRS house notes that the summer forecast of the European Commission for a growth rate of the Greek economy of 4% in 2022 will probably be revised upwards as the growth reached 7.7% in the first half of the year.
The worthiness of our country had a double confirmation in the evening
The credit rating agency Moody’s confirmed the creditworthiness of the Greek economy at the Ba3 level with stable prospects.
A little earlier the Canadian credit rating agency DBRS confirmed Greece’s credit rating at BB (high) with a stable trend.
In a statement, the Canadian house said the steady trend reflects its view that Greece remains committed to ensuring fiscal and debt sustainability, despite the adverse economic consequences of the Russian invasion of Ukraine.
According to DBRS, a strong recovery in tourism activity, which is expected to exceed 2019 levels, will help the economy this year, but economic uncertainty has increased due to geopolitical events.
The main risks to the outlook relate to rising inflationary pressures, tightening monetary policy and the potential disruption of Russian gas flows.
Despite declining dependence on Russian fossil fuels in recent years, Greece still has moderate exposure to Russian energy imports.
However, diversification efforts have intensified with the expansion of existing and construction of new liquefied natural gas (LNG) facilities and the commissioning of a new natural gas pipeline.
The tightening of monetary policies is increasing pressure on Greece’s borrowing costs, with Greek government bond yields recently rising above 4% after reaching historically low levels.
In DBRS’s view, Greece’s favorable debt profile, its high cash reserves and the European Central Bank’s support for Greek government bonds in a market disruption situation help balance the risks.
The house notes that the European Commission’s summer forecast for a growth rate of the Greek economy of 4% in 2022 will likely be revised upwards, as growth reached 7.7% in the first half of the year.
For public finances, he notes that a reduction of the primary deficit to 2% of GDP this year from 5% in 2021 is expected and that there will be a primary surplus from 2023.
The total cost of the government’s support measures to cushion the impact of increased energy costs on households and businesses is estimated at 3.8% of GDP in September 2022, with direct fiscal costs at 1.5% of GDP as a part is covered by revenues from the Emissions Trading Scheme.
RES-EMP
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