Athens, Greece - In a resounding endorsement of Greece's economic progress, Fitch Ratings has reaffirmed the nation's long-term foreign-currency issuer default rating at 'BBB-' with a stable outlook. Announced on Friday, this decision underscores Greece's successful efforts in solidifying its fiscal position and enhancing policy credibility.
Factors Fueling Fitch's Confidence:
- Robust Economic Foundation: Greece stands out among its 'BBB' peers, boasting significantly higher income per capita and impressive governance indicators.
- EU and Eurozone Advantage: Membership in the European Union and the Eurozone provides Greece with invaluable stability and policy support.
- Fiscal Prudence Reigns: The Greek government's commitment to fiscal responsibility shines through in its conservative revenue projections and ambitious revenue-generating reforms.
- Shrinking Debt Burden: Thanks to robust fiscal performance, stable interest rates, and moderate growth, Fitch projects Greece's public debt-to-GDP ratio to steadily decline to 147.3% in 2025, eventually dipping below 140% by 2028.
Challenges on the Horizon:
Fitch acknowledges that while the overall outlook is positive, Greece still faces headwinds:
- Echoes of the Debt Crisis: High levels of public and external debt serve as a reminder of the recent sovereign debt crisis.
- Employment and Growth Hurdles: The country continues to grapple with high unemployment rates and the challenge of unlocking stronger medium-term growth potential.
- Lingering Banking Sector Concerns: Some vulnerabilities within the banking sector require ongoing attention.
A Positive Signal for the Future:
Despite these challenges, Fitch's decision to maintain a stable outlook reflects a strong belief in Greece's continued economic recovery and reform momentum. This positive assessment is expected to further bolster investor confidence and pave the way for sustainable growth in the years to come.
