Greece’s Economic Outlook Remains Positive, Says R&I
Japan-based rating agency Rating and Investment Information (R&I) has upgraded Greece’s Foreign and Domestic Currency Issuer Ratings to BBB, citing strong economic growth, robust fiscal performance, and continued structural reforms.
According to R&I’s latest analysis, the Greek economy is showing sustained momentum, supported by private consumption, investment, and political stability under Prime Minister Kyriakos Mitsotakis.
Economic Growth Outpaces the Eurozone
Greece’s economy grew by 2.3% in 2024, outpacing the eurozone average.
The expansion was driven by higher disposable income fueling private consumption, a surge in tourism, and increased investment linked to the EU Recovery and Resilience Facility (RRF) and foreign direct investment (FDI) inflows.
Growth is projected to continue at a similar pace in 2025, despite limited direct exposure to U.S. tariffs.
While some negative spillovers from key trading partners like Germany and Italy are expected, easing trade tensions within the eurozone are providing relief.
Both the Greek government and the European Commission forecast 2.3% GDP growth in 2025, with R&I projecting approximately 2% growth annually from 2026 onwards.
Fiscal Balance Turns Positive
Greece recorded a fiscal surplus of 1.3% of GDP in 2024, with the primary balance reaching 4.8%.
These positive developments stem from targeted efforts to reduce tax avoidance and evasion, including the implementation of electronic taxation systems and the digital work card.
Fiscal discipline has been reinforced by improved employment and restrained public spending.
For 2025, the government anticipates a slight fiscal surplus of 0.1% and a 3.2% primary surplus, even after lowering social insurance contributions and increasing public sector wages — measures expected to be offset by stronger tax revenues.
R&I views this fiscal performance as sustainable under current economic conditions.
Government Debt on a Downward Path
The debt-to-GDP ratio continues to fall, with government estimates placing it at 145.7% by the end of 2025.
This downward trend is supported by sustained primary surpluses and interest rates that remain well below nominal GDP growth rates.
The government also maintains strong financial buffers, including cash and deposits covering roughly three years of funding needs, while the average debt maturity has reached 20 years — factors that contribute to improved debt sustainability, according to R&I.
Financial Sector Stabilization
Greece’s banking sector has made substantial progress in reducing non-performing exposures (NPEs) through government-backed securitization schemes.
The sector’s NPE ratio is now approaching the eurozone average.
Liquidity conditions have improved due to increased domestic deposits and strengthened equity capital.
Despite the persistent current account deficit, which remains in the 5–6% range due to strong domestic demand and import growth, tourism-related service surpluses help offset part of the trade imbalance.
Political Stability Underpins Reforms
R&I highlights Greece’s political stability under the Mitsotakis administration as a key factor enabling continued reform and economic revitalization. With no major political disruptions anticipated, the government is well-positioned to maintain its course of fiscal consolidation and investment-led growth.
Conclusion
R&I’s upgrade of Greece’s credit rating reflects growing confidence in the country’s economic resilience, fiscal discipline, and structural reform agenda.
With stable governance, falling debt levels, and sustained GDP growth, Greece is reestablishing itself as a reliable investment destination in the post-crisis European landscape.
www.bankingnews.gr
According to R&I’s latest analysis, the Greek economy is showing sustained momentum, supported by private consumption, investment, and political stability under Prime Minister Kyriakos Mitsotakis.
Economic Growth Outpaces the Eurozone
Greece’s economy grew by 2.3% in 2024, outpacing the eurozone average.
The expansion was driven by higher disposable income fueling private consumption, a surge in tourism, and increased investment linked to the EU Recovery and Resilience Facility (RRF) and foreign direct investment (FDI) inflows.
Growth is projected to continue at a similar pace in 2025, despite limited direct exposure to U.S. tariffs.
While some negative spillovers from key trading partners like Germany and Italy are expected, easing trade tensions within the eurozone are providing relief.
Both the Greek government and the European Commission forecast 2.3% GDP growth in 2025, with R&I projecting approximately 2% growth annually from 2026 onwards.
Fiscal Balance Turns Positive
Greece recorded a fiscal surplus of 1.3% of GDP in 2024, with the primary balance reaching 4.8%.
These positive developments stem from targeted efforts to reduce tax avoidance and evasion, including the implementation of electronic taxation systems and the digital work card.
Fiscal discipline has been reinforced by improved employment and restrained public spending.
For 2025, the government anticipates a slight fiscal surplus of 0.1% and a 3.2% primary surplus, even after lowering social insurance contributions and increasing public sector wages — measures expected to be offset by stronger tax revenues.
R&I views this fiscal performance as sustainable under current economic conditions.
Government Debt on a Downward Path
The debt-to-GDP ratio continues to fall, with government estimates placing it at 145.7% by the end of 2025.
This downward trend is supported by sustained primary surpluses and interest rates that remain well below nominal GDP growth rates.
The government also maintains strong financial buffers, including cash and deposits covering roughly three years of funding needs, while the average debt maturity has reached 20 years — factors that contribute to improved debt sustainability, according to R&I.
Financial Sector Stabilization
Greece’s banking sector has made substantial progress in reducing non-performing exposures (NPEs) through government-backed securitization schemes.
The sector’s NPE ratio is now approaching the eurozone average.
Liquidity conditions have improved due to increased domestic deposits and strengthened equity capital.
Despite the persistent current account deficit, which remains in the 5–6% range due to strong domestic demand and import growth, tourism-related service surpluses help offset part of the trade imbalance.
Political Stability Underpins Reforms
R&I highlights Greece’s political stability under the Mitsotakis administration as a key factor enabling continued reform and economic revitalization. With no major political disruptions anticipated, the government is well-positioned to maintain its course of fiscal consolidation and investment-led growth.
Conclusion
R&I’s upgrade of Greece’s credit rating reflects growing confidence in the country’s economic resilience, fiscal discipline, and structural reform agenda.
With stable governance, falling debt levels, and sustained GDP growth, Greece is reestablishing itself as a reliable investment destination in the post-crisis European landscape.
www.bankingnews.gr
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