Greece hails the recent upgrade of its economic outlook from "stable" to "positive," saying it confirms that Greece continues to move on the right track.
ATHENS, Sept. 8 (Xinhua) -- Greek officials and financial experts have hailed the recent upgrades of both the country's credit rating and that of its major banks, viewing it as another positive sign of the nation's economic recovery.
On Friday evening, Canadian credit rating agency DBRS Morningstar raised Greece's economic outlook from "stable" to "positive," maintaining its credit rating at BBB in the investment-grade category.
DBRS's statement noted that its outlook improvement is based on expectations of continued progress in areas such as fiscal discipline and the strengthening of the banking sector.
Last year, DBRS was the first of the major credit rating agencies to lift Greece out of "junk" status, a label the country had held since 2010 when it was grappling with a severe debt crisis.
Following the implementation of three tough bailout programs until 2018, Greek economy has recovered and successive positive assessments by third-party observers confirm that Greece continues to move on the right track, Kostis Hatzidakis, minister of national economy and finance, commented in a statement on Saturday.
The latest evaluation by DBRS is "another piece of good news on the course of Greek economy," he said. "It reaffirms that our economic policies with emphasis on fiscal discipline and investment-friendly measures are correct," he added.
The minister noted that DBRS commended Greece for meeting fiscal targets, increasing the growth rate of gross domestic product (GDP) and reducing the public debt-to-GDP ratio.
Greece's GDP will grow by 2.2 percent this year and 2.5 percent in 2025 mainly thanks to investments, supported by available European resources and private consumption, according to a report on the latest developments in Greek economy released by the central Bank of Greece (BoG) on Friday. Greek GDP grew by 2 percent in 2023.
The debt-to-GDP ratio decreased by 10.8 percentage points compared to 2022, to 161.9 percent of GDP in 2023, the lowest since 2010, according to the report. It was expected to further shrink to 152.7 percent this year and below 140 percent by 2027.
BoG also welcomed the upward trend of the credit ratings of Greece's four systemic banks that continues.
On Wednesday, Fitch Ratings upgraded the credit ratings of National Bank of Greece, Piraeus Bank, Alpha Bank, and Eurobank with a positive outlook that reflects the improved assessment of Greece's operating environment, now rated at 'BB+,' according to a press statement.
Both Fitch and DBRS justified their latest assessments taking into account the continuous reduction of non-performing loans (NPLs), expecting that Greece's banking sector will continue to have good profitability, they said.
"The new positive assessments of the major credit rating agencies mark another positive development for Greece. The upgrades of the country's credit rating and its systemic banks underscore the remarkable progress steps achieved in recent years," George Xiradakis, president of the Association of Banking and Financial Executives of Hellenic Shipping, told Xinhua on Saturday.
A positive environment means that Greek government bond yields and spreads may further retreat, Greek banks could borrow on better terms and subsequently finance the real economy to further grow to the benefit of businesses and households, he said.
BoG as well as the rating agencies noted that as other small economies, Greece is more vulnerable to geopolitical crises the world is faced with that could impact negatively key pillars of its economy, such as tourism and shipping industries.
Athens and international markets now await the forthcoming assessment of Greece's sovereign credit rating by Moody's expected on Sept. 13. So far Moody's evaluates Greece's credit rating at Ba1 with stable prospects. ■
