According to her, Greece will demonstrate one of the largest debt reduction among all countries in the world. Moody’scalculating that By 2025, Greece’s public debt will be reduced to below 150% of GDP.compared to 171.3% at the end of 2022.

Growth prospects are helping reduce debt as the Greek economy posted a strong post-pandemic recovery, with real GDP growing 5.9% in 2022 and 8.4% in 2021 after contracting 9% in 2020, analysts said. agency note.

“While Greece’s debt ratio will remain very high in the coming decades, debt burden has become much more sustainablethanks to very favorable terms for repayment of eurozone loans and significant debt relief provided by eurozone creditors since 2017,” notes Moody’s.

Nearly 80% of Greek debt, excluding short-term interest-bearing notes and repos with other Greek government entities, is held by eurozone institutions, including the ECB and other European central banks.

As a result, Greece’s interest payments as a share of government revenue are low and are expected to remain so for a long period, Moody’s notes, even with the financial impact of the pandemic and a return to regular bond issuance in the markets.

In fact, with interest payments corresponding to 5.5-6% of income, Greece has more ability to repay its debt than Italy, the chamber concludes.

Elections

Referring to last Sunday’s election results, Moody’s reaffirms its already published view that this is positive for Greece’s credit rating as it “demonstrates” the continuity of fiscal and economic policies.

Continued efforts to improve the business environment and rehabilitate the banking sector, coupled with the implementation of the milestones and reforms of the National Recovery Plan, are expected to support economic growth. Along with a commitment to fiscal adjustment and an increase in primary surpluses, maintaining current fiscal and economic policies improves the prospects for significant debt reduction in Greece, the report said.