S&P revises Greece’s outlook to ‘positive’ on debt reduction
Credit ratings agency S&P on Friday revised its outlook on Greece to “positive” from “stable,” saying the tight fiscal regime will continue to spur a reduction in the government debt ratio.
Economic output is expected to rise 2.9% in 2024, following a 2.0% expansion last year, more than three times the eurozone average. The country also projects a 2.1% of GDP primary budget surplus on higher investment and strong tourism revenue.
“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.
The country remains the eurozone’s most indebted nation, but Prime Minister Kyriakos Mitsotakis’ centre-right New Democracy government, which won a second term last year, has overseen a period of recovery.
“The further upgrade of the Greek economy by Standards & Poor’s within a few months is yet another indication that Greece’s efforts are bearing fruit,” Economy and Finance Minister Kostis Hatzidakis said.
“It is, however, also a response to those constantly whining and trying to downplay the positive developments of the last five years – the unprecedented increase of exports, the fact that in the last few years Greece has achieved a record number of direct foreign investments, the great drop in unemployment by seven percentage points, and that we recently have had a five-fold rate of growth compared to the eurozone average,” he added.
Hatzidakis said that the recognition of this significant progress by all international organizations and credit rating agencies “will not make us complacent. On the contrary, it gives us the strength to continue the effort and to promote all necessary reforms that will lead Greece’s economy ever higher. We pass over small-minded criticism and forge ahead with speed and decisively.”
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 will raise its monthly minimum gross wage by 6.4% to €830, a decision aimed at easing the burden on households squeezed by a higher cost of living.
The agency also affirmed its long and short-term ratings for Greece at “BBB-/A-3.”
Greece last year regained investment-grade status from credit rating agencies after 13 years in the “junk” category due to its overwhelming national debt.
S&P last upgraded Greece’s rating in October, while Fitch upgraded it in December. [Reuters/AMNA]
