The Canadian credit rating agency DBRS has affirmed Greece’s credit rating at BBB (low) with a stable outlook. The Canadian house had given the investment grade to Greece last September, after the German credit rating house Scope, while S&P and Fitch followed in similar moves in October and December, respectively.

In its statement, DBRS says the stable trend reflects its view that the risks to the credit rating are balanced.

“Good economic performance combined with growing primary surpluses are expected to contribute to keeping the debt-to-GDP ratio on a strong downward trajectory going forward,” he notes.

After strong GDP growth of 5.6% in 2022, economic activity in Greece has slowed to close to 2% and is expected to remain above this level in 2024-2025.

Rising primary surpluses, projected above 2% of GDP over the same period, from 1.1% in 2023, will help the debt-to-GDP ratio fall below 150% of GDP in 2025 from 160% of GDP estimated to have risen last year.

In addition, the implementation of structural reforms is gaining strong momentum and combined with higher investment, supported by EU funds, will increase potential GDP.

However, the house notes, heightened geopolitical risks affecting trade and a larger-than-expected impact on the economy from current tight financing conditions could lead to slower growth and weaker public finances.

Greece’s credit rating is supported by its membership in the EU and the Eurozone and by the implementation of reforms in the past that have increased the resilience of the economy, the house says.

Greece continues to make progress in implementing the Growth and Resilience plan, which includes reforms that boost fair growth and investment, thereby narrowing the investment gap between Greece and other Eurozone countries.

DBRS is of the view that EU funds will continue to provide incentives to implement growth-enhancing reforms, while supporting increased investment with capital also channeled through the strengthened banking system.

The credit rating, DBRS notes, is constrained by the remnants of Greece’s protracted crisis, namely very high public debt, a still high rate of non-performing loans and a high, though now near single-digit, unemployment rate.

The critical assessment by Moody’s is expected next Friday.