Last night, the credit rating agency DBRS upgraded the outlook (trend) of the Greek debt to positive from stable, confirming the debt at the BBB (low) level.

The outlook upgrade reflects DBRS’s expectations for further improvement in the fundamentals of the banking system, the house said in its statement.

The banking sector, he adds, is likely to continue to have good profitability, reduce non-performing loans (NPLs) and reduce deferred tax credits.

The banks’ strong bond with the government in the past has also weakened as a result of the government’s decision to sell large stakes in systemic banks.

In addition, the Canadian house notes, healthy and growing primary surpluses, combined with healthy nominal growth, will facilitate a further significant reduction in the public debt-to-GDP ratio, which is expected to fall below 140% by 2027. from 161.9% in 2023.

Also, the implementation of structural reforms remains on track, which, together with higher investment supported by European Union (EU) funds, is expected to increase potential GDP and make the country’s growth more self-sustaining.

As of 2021, Greece has higher growth than the Eurozone average and this is likely to continue over the next two years, the house says. GDP is expected to grow by more than 2% in both 2024 and 2025.

Greece’s BBB (low) rating is supported by its participation in the EU and the Eurozone and by the fact that it has implemented institutional and financial reforms that have strengthened the resilience of the economy.

The country continues to make progress in implementing the Recovery and Resilience Planreports DBRS, which is expected to improve the country’s business environment, boost productivity and help reduce the investment gap with other countries in the euro area.

Substantial EU resources provide incentives to implement growth-enhancing reforms while supporting investment with capital also channeled through the strengthened banking system.

In addition, he notes, there is strong political commitment to maintaining a prudent fiscal strategy, which is reflected in the rapid improvement in the primary surplus despite the multiple shocks faced by the economy from 2020 onwards.

The credit rating is constrained by the still high public debt ratio, the small size of the economy and the persistent current account deficit.

K. Hatzidakis: Another positive news for the course of the Greek economy

The Minister of National Economy and Finance, Kostis Hatzidakis, after the announcement by DBRS Morningstar on the upgrading of the prospects of the Greek economy to investment grade, made the following statement:

“The Canadian rating agency DBRS Morningstar, the first recognized by the ECB to award the Greek economy investment grade last year, today upgraded its outlook from stable to positive.

Another positive news for Greece after today’s announcements from Eurostat, which ranks the Greek economy second in the EU in terms of growth in the second quarter of 2024. Another positive news after the results of the ODHIX auction for one-year bonds, according to which Greece at the beginning of September borrowed at an interest rate of 2.82%, lower than France and comparable to the corresponding German one.

Perhaps even more important are what the DBRS report says about the progress and prospects of the Greek economy. To achieve fiscal goals. The growth rate which is higher than the EU average. The positive estimates for the current account balance. The reduction of the public debt which – as mentioned – at the end of 2024 is estimated to be one of the biggest reductions in modern times. But also the political stability that guarantees the continuation of the reforms.

The DBRS Morningstar report is yet another proof of the soundness of economic policy based on fiscal responsibility, pro-investment actions and tangible results for citizens and businesses. It is one more reason to accelerate the effort with the same policy mix to take Greece higher.”

Nikos Papathanasis: The DBRS announcement is a new international message of credibility for the Greek economy, it reinforces the goal for more investments and new jobs

The Deputy Minister of National Economy and Finance, Nikos Papathanasis, on the occasion of the announcement of DBRS Morningstar on the Greek economy, underlined:

“The new positive assessment by the Canadian rating agency DBRS Morningstar – one of the few international agencies recognized by the European Central Bank – is another international signal of confidence in the reliable economic policy of the governments of Kyriakos Mitsotakis.

At a time that is still characterized by liquidity and unprecedented multi-level crises at the international and regional level, this development, in continuation of all similar evaluations that preceded it and resulted in the recovery by Greece of the investment grade after almost 14 years , only it does not have a technical nature, only it is not accidental.

It comes to confirm the resilience of the economy and the systematic effort that has been underway since 2019. It further strengthens the country’s development prospects, improving borrowing costs, reducing debt as a percentage of GDP, accelerating the filling of the investment gap that caused by the crisis, the strengthening of exports, but above all, the reduction of unemployment by creating even more and better-paid jobs for all our fellow citizens, primarily young women and men.

However, despite its positive effects, the evaluation alone does not cause us complacency. On the contrary, it reinforces our belief that only with fiscal discipline, stability, responsibility and efficiency, the country will remain on a path of sustainable development. Through the continuation of reforms and structural changes, which will ensure double convergence, both with the rest of Europe, and between all Regions of the country. We are creating this Greece as we committed ourselves, this is the Greece we deserve”.