In a statement, S&P said that after a strong performance in 2022 it expects economic growth in Greece to slow below 2% in 2023, “with possible further energy disruptions in Europe clouding the outlook”.
Credit rating agency Standard & Poor’s (S&P) left Greece’s debt unchanged at ‘BB+’, one step below investment grade, with a stable outlook.
S&P had upgraded the Greek debt to ‘BB+’ from ‘BB’ on April 22 this year, in the midst of the war in Ukraine, citing improved economic governance.
In a statement, S&P said that after a strong performance in 2022 it expects economic growth in Greece to slow below 2% in 2023, “with possible further energy disruptions in Europe clouding the outlook”.
It notes that annual inflation looks likely to ease from September’s multi-decade highs, with wages rising only slightly (by 0.9% year-on-year in the second quarter of 2022) and dampening demand.
Despite the government’s support measures to protect against the economic impact of energy and food price shocks, the 2022 budget deficit is expected to narrow to 4% of GDP this year and decline further in 2023, putting public debt as percentage of GDP in decline.
The stable outlook reflects S&P’s expectation that Greece’s fiscal cushions and proven policy effectiveness will allow the country to absorb the indirect effects on its economy and public finances from the war in Ukraine.
RES-EMP
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