Credit rating agency DBRS (DBRS Morningstar) affirmed Greece's credit rating at BBB(low) with a stable outlook on Friday. This follows similar upgrades by other agencies in recent months.
DBRS cites Greece's improving economic performance and rising budget surpluses as reasons for the positive outlook. These factors are expected to reduce the country's high public debt-to-GDP ratio. Additionally, ongoing structural reforms and increased investments fueled by EU resources are seen as positive signs for future growth.
However, DBRS acknowledges potential risks. Geopolitical tensions and tighter financing conditions could dampen economic activity and strain public finances. The high debt burden, non-performing loans in the banking system, and lingering unemployment also remain challenges.
Despite these concerns, Greece's EU membership and past economic reforms provide a foundation for continued improvement. The country's Recovery and Resilience Plan aims to promote inclusive growth and investment, narrowing the gap with other eurozone nations. DBRS believes continued EU support will incentivize further reforms and boost investment through a strengthened banking system.
In essence, Greece's credit rating reflects a cautiously optimistic view of its economic trajectory. While significant progress has been made, addressing longstanding issues remains crucial for long-term financial stability.
