One of China’s largest rating agencies, Lianhe Credit today upgraded Greece’s long-term credit rating from BBB- to BBB investment grade with a stable outlook.

This upgrade comes a day after another major Chinese rating agency upgraded the Greek economy. THE China Chengxin Credit Rating Group upgraded Greece’s credit rating from B- to BB+ with a fixed perspective.

The upgrade of Greece’s sovereign credit rating by two of China’s largest rating agencies reflects the Chinese side’s confidence in Greece’s improved economic situation, reduced banking risks, macroeconomic growth prospects and reform momentum.

Finally, the belief is expressed that the recovery of Greece’s credit rating to investment grade will strongly attract more Chinese investors to the Greek market and further unleash the potential of Sino-Greek economic and trade cooperation.

The drivers of Chinese upgrading

The two rating agencies have upgraded Greece’s credit rating based on the following reasons: In 2022, benefiting from EU financial assistance, the Greek government’s structural reforms and the recovery of international tourism, etc., the Greek economy recovered strongly and the rate of economic growth exceeded the euro area average, which is expected to continue growing steadily in 2023.

Also, as noted in the assessments, the Greek government continued to promote reforms in various sectors, and the government’s ability to balance its finances is steadily improving, with a significant reduction in the fiscal deficit and debt burden. Moreover, it is pointed out that sufficient bank liquidity and the continued improvement in the quality of bank assets ensure that profitability remains stable, with the NPL ratio falling to its lowest point in almost 12 years.

Furthermore, it is noted that the Greek labor market has improved significantly, with unemployment falling to a new record low since 2009 and GDP per capita exceeding $20,000. It is further reported that in June 2023, the New Democracy party won a landslide victory in the elections, allowing for a smooth transition of government and ensuring the continuation of Greece’s economic and fiscal restructuring policies.