Greece's public debt is steadily decreasing as the economy recovers and primary surpluses return post-pandemic. By early 2024, government debt dropped to 159.8% of GDP, its lowest since 2012. Regaining investment grade status in 2023, Greece's debt is projected to continue declining, potentially reaching 60% of GDP in 40 years with ongoing economic reforms and sustained primary surpluses.
This financial improvement has led Greece to regain its investment grade status in 2023, with ongoing upgrades from credit rating agencies.
Recent data from the first quarter of 2024 reveals that the general government debt has dropped to 159.8% of GDP, down from 169.4% a year earlier and a peak of 207% at the end of 2020 due to pandemic-related economic support measures.
Despite still having the highest debt in the Eurozone, Greece's debt is now at its lowest level since 2012, when it was reduced to 157.2% of GDP following a significant bond haircut. Rating agencies project a continued decline, with Scope Ratings predicting Greek debt will be lower than Italy's by 2026.
The Bank of Greece, led by Governor Yannis Stournaras, forecasts that debt could decrease to 60% of GDP in about 40 years, provided that Greece maintains primary surpluses close to 2% of GDP and continues economic reforms. This outlook relies on sustaining a favourable difference between debt repayment interest rates and economic growth rates.
Read more: Greek economy
(Source: Amna)
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