The obstacles it faces Greek economy on the way to investment grade points to Region ratingthe first house to take Greece a step away from this milestone and which, however, is not one of the four houses that the ECB “listens to”.

Scope, which will publish its next assessment of Greece on March 3, notes that while the country has made significant progress, some economic problems remain. In particular, the weaknesses of the Greek economy are: moderate medium-term growth at 1%, the highest unemployment rate in Europe on average at 11.6%, limited economic diversification, labor market rigidity, external sector vulnerability and a still high level of delinquent loans.

In addition, the elections also increase political uncertainty, as any change in economic policy after the elections could increase financial risks, he said.

The House of Representatives estimates that growth will slow to 1.3% this year, from 4.9% in 2022, and then accelerate to 2% in 2024, moving at a rate of 1.4% in 2025-2027. . Inflation will fall from 9.3% in 2022 to 3.9% this year and to 2.8% in 2024.

Scope expects a primary surplus of 1% of GDP between 2024 and 2027, slightly short of the government’s target of 2%. “Maintaining prudent primary surpluses after the completion of the enhanced oversight program and after the 2023 election is critical to recovering investment grade,” he stresses.

According to Scope, the significant increase in European institutional support for the country since the start of the COVID-19 crisis is a strong “cushion” for Greece’s assessment and will positively affect its “assessment” if it continues even after the elections.

The positive outlook given by the house for Greece is also based on the downward trajectory of Greek debt. He estimates that the debt ratio will drop to 164.5% this year from 171% in 2022 and to 150.5% by 2027.

However, as he points out, while high inflation helps lower the debt ratio, it could also be a major obstacle to Greece’s path to investment grade if lending rates rise again.