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Economy

Standard & Poor’s Changes Greek Outlook to Positive, Recovery Rolls On

ATHENS – It hasn’t trickled down to many households struggling with high supermarket prices, low wages, and high taxes, but Greece’s remarkable economic comeback has now seen Standard & Poor’s revising its outlook to positive from stable.

That follows major ratings agencies giving Greece investor-grade status, ending years of being rated as junk bonds during a 2010-18 economic and austerity crisis, driving away foreign investors now returning.

Prime Minister Kyriakos Mitsotakis has successfully lured international businesses, including high-tech giants, who get favorable tax treatment while the income tax is 45% for those making more than €40,000 ($42,733) annually.

S&P applauded the New Democracy government’s tight fiscal regime, which the agency said would further reduce the debt, although Greece for years will be repaying what’s left of €326 billion ($348.27 billion) in three international bailouts.

Greece expects economic output to rise 2.9% in 2024, following a 2% expansion in 2023, more than three times the Eurozone average, projecting a 2.1% of Gross Domestic Product (GDP) primary budget surplus on the back of higher investment and a record €20.6 billion ($22.01 billion) in record tourism revenues.

“In the medium term, and particularly if reform momentum is maintained, we believe Greece could expand faster than its Eurozone peers,” the agency said in a statement about the 20 countries using the euro, noted Reuters news agency.

Despite the bailouts, Greece is one of the Eurozone’s most indebted nations, although that’s been cut down from what Mitsotakis said was an unsustainable level before he took office in 2019, winning re-election in 2023.

S&P said that it expects Greece to continue to implement structural reforms that support positive medium-term economic and fiscal outcomes. In March, the government said it would raise the monthly minimum gross wage by 6.4% to €830 ($886.63).

The agency also affirmed its long and short-term ratings for Greece at BBB-/A-3.

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