AT Refresh Greece’s credit rating to BB+ with a stable outlook, Fitch said tonight.

Update reflects improving the fiscal prospects of our country, reducing risks in the banking sector, structural dynamics, macroeconomic prospects and the acquired speed of reforms, de-escalation of inflation and a stable cost of financing.

OUR Fitch now expecting better results with respect to deficit and duty and improved forecasts for 2022-2024 due to stronger nominal growth and a favorable debt-servicing structure. It projects the general government deficit to narrow further to 1.8% of GDP in 2024 from an estimated 3.8% in 2022. This assumes a 0.9% surplus in 2024 (and a balanced position in 2023). ). The House of Representatives is certainly highlighting some fiscal policy uncertainty after the upcoming parliamentary elections, but the risks are mitigated by broad commitments and a recent history of fiscal prudence.

In 2022, Greece benefited greatly from strong acquired speed after decades of high nominal growth and a very modest increase in the average cost of interest, bringing the debt-to-GDP ratio down to 170%. We expect the debt ratio to decline to a more moderate level over the medium term due to the primary surplus.

However, even with the projected 160.6% in 2024, debt ratio still among sovereigns with the highest Fitch rating and more than 3 times the average ‘BB’ rating, although mitigating factors such as low debt service costs, very long maturities (around 20 years) and significant liquidity buffers ( about 15% of GDP) reduce risks to public finances.

The house also sees significant progress in reducing non-performing loans (NPLs), while the NPL ratio fell to 9.7% in the third quarter of 2022, below 10% for the first time since 2009, thanks to the Hellenic Asset Protection Scheme (HAPS) and a massive economic recovery. Fitch expects further improvement in the sector’s assets on the back of limited new inflows. Non-performing loan ratios at non-systemic banks will continue to be a problem, but as these banks represent less than 5% of the industry, the potential risks are very limited.

Statement by the Minister of Finance

Finance Minister Kristos Staikouras said in a press release that the upgrade of Fitch Ratings’ credit rating “confirms that the national goal of achieving investment grade by 2023 – with multiple benefits for society and the economy – is achievable.”

Mr. Staikouras also noted in his statement that Fitch is “the fifth rating agency and the third among rating agencies to meet the requirements of the European Central Bank, which puts the country just one ‘notch’ ahead of the investment rating” and that “this is the 12th upgrade rating of the Greek economy over the past 3.5 years, despite successive external crises”.

He speaks of a “positive development” that “represents another fruit – and at the same time evidence – of responsible, cost-effective and socially just government economic policies, forward-thinking publishing strategies, keeping cash reserves at a safe level. , implementing structural changes, improving the composition of GDP through a significant increase in investment and exports, a sharp reduction in “red” loans in bank portfolios, reducing unemployment and promising use of European resources, primarily from the Recovery and Sustainability Fund.