Greece's Economic Triumph: Debt Reduction Elevates Credit Rating

In a significant development for Greece’s economic landscape, Fitch Ratings has elevated the country’s long-term credit rating to BBB from BBB-, with a stable outlook. This marks a remarkable moment in Greece’s journey of financial recovery, underscored by robust debt reduction strategies, remarkable fiscal achievements, and sustained economic growth.

Government’s Pride in Financial Progress

The Greek government has warmly welcomed Fitch’s decision, seeing it as a validation of the country’s economic policies and fiscal credibility. Kyriakos Pierrakakis, Minister of National Economy and Finance, emphasized that the upgrade signifies lower borrowing costs and greater liquidity for businesses, enhancing Greece’s appeal as a hub for investment opportunities and job growth. According to him, this is a collective victory for all citizens, reinforcing a vision of a modern and equitable Greece.

Debt Trajectory Outpacing European Peers

Greece’s strategic debt reduction is gaining accolades, with expectations to lower its public debt to 145% of GDP by 2025. Although still above the peer average, the pace of reduction—over 60 percentage points since 2020—positions Greece as a standout amongst investment-grade countries.

Fitch forecasts the debt to further descend to around 120% of GDP by 2030, driven by a robust GDP growth rate and substantial primary surpluses from 2027 onwards. This optimistic outlook is bolstered by Greece’s strong debt profile, characterized by long maturities and low interest rates.

Fiscal Discipline and Credible Policies

Fitch has highlighted Greece’s commendable fiscal performance, expecting the government surplus to remain solid at around 1% of GDP in 2025. The stability arises from enhanced tax collection and prudent spending approaches. Furthermore, new domestic fiscal rules aim to enshrine these fiscal strengths, ensuring balanced primary positions and a credible policy framework moving forward.

Surging Growth and a Strengthened Banking System

Outpacing the eurozone average, Greece’s economy is growing rapidly, driven by strong domestic demand and supported by EU recovery funds. The banking sector is also witnessing a renaissance, with systemic banks achieving investment-grade status for the first time in recent years, due to strengthened balance sheets and stabilizing capital foundations.

According to GreekReporter.com, these developments collectively signal Greece’s enduring economic resilience and reflect positively on its global economic standing, offering a promising prospect for future investments and growth.