Fitch Revises Greece’s Outlook to Positive; Affirms at ‘BB’ – Οικονομικός Ταχυδρόμος


Fitch Ratings revised the Outlook on Greece’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at ‘BB’.
The revision of the Outlook on Greece’s ratings reflects the following key rating drivers and their relative weights: Strong economic growth dynamics and a falling fiscal deficit will support a faster than expected decline in public sector indebtedness, in the context of low current and expected borrowing costs. Greek banks have made substantial progress on asset quality improvement, sharply reducing the level of non-performing loans (NPLs) in the banking sector and enhancing their ability to provide credit to the real economy.
Economic activity in Greece has recovered at a faster pace than Fitch expected at the time of the previous rating review in July 2021. Fitch estimates that real GDP growth for the year as a whole was 8.3%, substantially higher than our July forecast of 4.3%. Real GDP growth in 1Q-3Q21 was 9.5% compared with the corresponding period in 2020, and the level of real GDP in 3Q21 was estimated to be around 1% above the pre-pandemic level of 4Q19.
Fitch expects the recovery in economic activity to continue in 2022, as the deployment of the NGEU funds gathers pace, and for the economy to expand by a further 4.1%, with a similar growth rate forecast for 2023. The grants component included in Greece’s Recovery and Resilience Plan (RRP) amounts to around EUR18 billion (just under 10% of…

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