x

Economy

Fitch Upgrades Greece’s Credit Outlook to Positive

January 15, 2022

ATHENS — Credit ratings company Fitch has revised Greece’s outlook to positive from stable, although it kept the country’s rating at BB, two notches below investment grade.

In a report issued Friday, Fitch estimates that the Greek economy grew 8.3% in 2021, much faster than the 4.3% forecast in its previous rating review last July, although growth still took a hit in the last quarter as a result of the coronavirus pandemic waves fueled by virus variants. Before that, the country’s gross domestic product (GDP) had exceeded pre-pandemic levels.

Greek banks are a big reason for the upgrade, “sharply reducing the level of non-performing loans… and enhancing their ability to provide credit to the real economy.”

Further on the positive side, Fitch expects the economic recovery to extend to 2022 and 2023, with GDP expanding 4.1% in each of these years. Also, the still heavily-indebted country is expected to fully repay one of its creditors, the International Monetary Fund, in 2022.

On the negative side, the deficit is declining very slowly, falling to 9.7% of GDP in 2021 from 10.1% in 2020. Fitch notes that this was “due to the continued pandemic-related support provided by the government to the private sector, amounting to 15.6 billion euros ($17.8 billion or 8.7% of forecast 2021 GDP). But the phasing out of pandemic-related support measures will help lower the deficit to 4.1% in 2022 and 2.9% in 2023.

Fitch expects the current account deficit to remain high as the demand growth that goes along with the recovery will fuel imports and offset export growth and higher income from tourism.

An upgrade in outlook is usually, but not always, followed by a credit upgrade within 12-18 months.

Greece hopes to see its debt upgraded to investment grade by the end of 2022 or early 2023 for the first time since 2010 when the financial crisis caused by excessive deficits and debt hit the country hard, necessitating years of austerity imposed by its creditors.

Fitch notes that “Greece has high income per capita that far exceeds” the median level of countries in the same investment grade and that “governance scores and human development indicators are among the highest of sub-investment grade peers.” Nonetheless, the still very high debt levels and bad bank loans drag the country’s rating down, Fitch says.

RELATED

ATHENS - While denying reports that refugees and migrants were being pushed back on land and sea, Greece's New Democracy government is trying to keep them out, the Coast Guard saying it repelled 1,130 crossing on boats from Turkey.

Top Stories

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

General News

PHILADELPHIA – The Federation of Hellenic Societies of Philadelphia and Greater Delaware Valley announced that the Evzones, the Presidential Guard of Greece will be participating in the Philadelphia Greek Independence Day Parade on March 20.

Video

Mission…to Alonnisos, a TNH Documentary

O oceanic you sing and sail White on your body and yellow on your chimeneas For you're tired of the filthy waters of the harbors You who loved the distant Sporades You who lifted the tallest flags You who sail clear through the most dangerous caves Hail to you who let yourself be charmed by the sirens Hail to you for never having been afraid of the Symplegades (Andreas Empeirikos)   What traveler has not been fascinated by the Greek islands, drawn by the Sirens’ song of a traveler’s dreams? TNH and our video show ‘Mission’ marked the change of the season by transporting viewers into the heart of summer.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. abc@xyz.com

You may unsubscribe at any time using the link in our newsletter.