To the question of why it did not award – as the other rating agencies have already done – the investment grade, the answer is simple: Moody’s had proceeded to upgrade the Greek economy by two notches just six months ago, on September 15, 2023 .A further upgrade was not expected at such short notice – it is standard practice for rating agencies to allow a reasonable period of time between upgrades, both on the rating and on the outlook.
Moody’s is the last house from which we expect the investment grade that Standard and Poor’s, Fitch, DBRS, R&I and Scope have already awarded to the Greek economy. The benefits of the upgrade are already visible in the Government’s borrowing costs and in the de-escalation of spreads which are already at lower levels than other eurozone countries.
What emerges from the Moody’s report
The main message that emerges from the Moody’s report is that: A condition for upgrading to investment grade is the continuation of the government’s policy for fiscal stability on the one hand and acceleration of reforms on the other.
The house also highlights the significant progress achieved in previous years in seven different areas, specifically noting the following among others:
Growth: This is set at 5.6% in 2022 and despite slowing to 2% in 2023, mainly due to persistent inflation and interest rates, Moody’s forecasts real GDP growth of 2.4% in 2024 and 2.3% in 2025, supported by domestic demand, exports, EU funds and private investment.
Fiscal deficit: Reduced rapidly to less than 1% of GDP in 2023 from 2.4% in 2022 (according to the house’s estimates, as official figures from ELSTAT have not yet been announced). Moody’s projects the fiscal deficit to stabilize at 0.9% of GDP in 2024-25, while primary surpluses will hover around 2% of GDP.
Public debt: estimated at 161% of GDP at the end of 2023 from 172.6% in 2022 and is projected to further decrease to 148% at the end of 2025.
External balance: Moody’s sees the current account deficit narrowing to 6.4% of GDP in 2023, from 10.3% in 2022.
Inflation: Expected to decline further to 2% in 2024-2025.
Red loans: the “significant reduction” of NPLs in previous years is noted.
Reforms: Moody’s notes that continued reforms that improve the functioning of Greece’s labor and product markets and achieve fiscal primary surpluses may yield larger than expected positive effects.
In conclusion, Moody’s analysis records the significant progress made by the Greek economy and prescribes a continuation of the positive economic developments.
Mitsotakis on Euronews: The 2+1 challenges once morest the backdrop of the European elections – What he said regarding the challenges
Thessaloniki: The 52-year-old woman was acquitted of the 94 dogs she hosted in her home
Manolis Mavromatis: The latest on his and his wife’s health
Pimping ring: New revelations regarding 7 underage girls released by traffickers – Maria’s role, fare and weekly dates [βίντεο]
Thessaloniki: Public prosecutor’s investigation following a publication regarding a “nuclear riffraff at AUTH”
#Moodys #maintained #credit #rating #Greek #economy
