Her upgrade of the Greek economy, giving it the investment grade, “BBB-“, announced on the evening of Friday, October 20, 2023, the credit rating agency Standard & Poor’s.
After this development Greek bonds upgrade to BBB- from BB+ with a stable outlook.
It is the second of the four major rating agencieswhich are taken into account by the European Central Bank which proceeded with this move, as the Canadian house DBRS had preceded it on September 8.
H Greece regained investment grade from the American rating agency Standard and Poor’s. Greek bonds are now rated BBB- (from BB+ which was the rating until today) while the outlook for the economy is now characterized as positive. Greece’s public finances are improving, S&P says in its report, adding that it expects more reforms which, in combination with the utilization of investment funds from the EU, can contribute to the development of the Greek economy for the period 2023-2026. S&P says it will further upgrade the Greek economy if the debt-to-GDP ratio falls significantly in the next period of time.
Prime Minister Kyriakos Mitsotakis in a post on X says: “An important milestone today, as Standard and Poors upgrades Greece to investment grade. Proud to recognize what our country has achieved. We are determined to continue our reform agenda, a path that attracts investment, creates new jobs and achieves inclusive growth.”
After the US house’s announcement, the finance minister made the following statement: After the publication of the S&P report with which Greece obtains the investment grade, the Minister of National Economy and Finance Kostis Hatzidakis made the following statement:
“S&P is the fourth rating agency in a row and the second one recognized by the ECB to assign an investment grade to Greece in recent months after 13 years. The S&P report itself is more than positive and so eloquent that I personally have nothing to add. Let those who constantly try to underestimate the efforts and results of government policy in the economy read it.
The country is facing a historic window of opportunity as they combine the right mix of economic policy with political stability. And it is our patriotic duty to take advantage of the opportunity and move forward for the benefit of all Greeks, especially the weakest.
As I recently underlined at ECOFIN, Greece, regardless of the outcome of the ongoing negotiations in the European Union on the new fiscal stability rules, is and will remain oriented towards the policy of fiscal seriousness. A policy that is the only stable basis for maintaining the country’s credibility in international markets, attracting investment and sustainable development”.
It is recalled that S&P underlines in its relevant report how it assigns Greece the investment grade because the following factors are present:
1. The significant fiscal consolidation that has been achieved, which is supported by a rapid recovery of the economy and results in the Greek government exceeding the fiscal targets it sets itself.
2. The clean mandate New Democracy received in the elections, which allows the government to continue with reforms.
3. The continued reduction of public debt which, according to S&P, is expected to reach 145% of GDP in 2023 and 138% in 2026, compared to 189% of GDP in 2020. The house also notes that while debt remains high, “its profile is one of the most favorable of all the states we assess as the weighted average duration of central government debt was 17.2 years at the end of June 2023 and interest payments correspond to a relatively low (5.6%) rate of the revenues of the general government”.
As noted in the report: “The recovery from the debt crisis and subsequently from the COVID-19 pandemic has boosted investment growth and confidence in the economy. The rapid digitization of public services has led to significant progress in reducing tax evasion and improving public sector efficiency. The strong performance of tourism, shipping and manufacturing in recent years, along with progress in the sale and settlement of non-performing loans, has prompted additional investment.”
It still has the highest growth rate compared to other EU countries, despite the effects of natural disasters. And this is due to the record-breaking performance in tourism, the increase in investment, the decrease in unemployment and the improvement in the financing of the economy. Also, that inflation is starting to normalize and is moving towards the ECB’s target of levels below 2%.
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Greece credit rating S&P
Table of Contents
Greece Regains Investment Grade Status: A Milestone in Economic Recovery
In a significant development, Greece has regained its investment grade status, a testament to the country’s ongoing economic reforms and growth. The credit rating agency Standard & Poor’s (S&P) upgraded Greece’s credit rating to “BBB-” with a positive outlook on October 20, 2023, marking a historic milestone in the country’s economic recovery [[3]].
S&P Upgrades Greece to Investment Grade
This upgrade comes on the heels of S&P’s report, which highlights Greece’s significant fiscal consolidation, rapid economic recovery, and continued reduction of public debt [[3]]. According to S&P, Greece’s public finances are improving, and the agency expects further reforms, coupled with the utilization of investment funds from the EU, to contribute to the country’s development from 2023 to 2026. Notably, S&P has stated that it will further upgrade the Greek economy if the debt-to-GDP ratio falls significantly in the next period of time.
Prime Minister and Finance Minister React to the Upgrade
Prime Minister Kyriakos Mitsotakis hailed the upgrade as a significant milestone, saying, “We are determined to continue our reform agenda, a path that attracts investment, creates new jobs, and achieves inclusive growth” [[4]]. Meanwhile, Finance Minister Kostis Hatzidakis emphasized that Greece is facing a historic window of opportunity, combining the right mix of economic policy with political stability, and it is the country’s patriotic duty to take advantage of this opportunity and move forward for the benefit of all Greeks, especially the weakest [[4]].
Upgrades from Other Credit Rating Agencies
Greece’s upgrade to investment grade status has been backed by other credit rating agencies, including DBRS, which had preceded S&P in upgrading Greece’s credit rating to investment grade on September 8 [[2]]. Moreover, Fitch Ratings has also upgraded Greece’s debt to investment grade status, opening the door to a multitrillion-dollar investment pool for the nation’s bonds [[1]].
Factors Contributing to the Upgrade
According to S&P, the following factors contributed to Greece’s upgrade to investment grade status:
- Significant fiscal consolidation, supported by a rapid recovery of the economy and the Greek government exceeding its fiscal targets.
- The clean mandate received by New Democracy in the elections, allowing the government to continue with reforms.
- Continued reduction of public debt, expected to reach 145% of GDP in 2023 and 138% in 2026, compared to 189% of GDP in 2020.
Outlook for the Greek Economy
The upgrade is a significant boost to Greece’s economy, which is expected to continue growing and attracting investment. The country’s government is committed to maintaining a policy of fiscal seriousness, which will remain the stable basis for maintaining the country’s credibility in international markets, attracting investment, and achieving sustainable development.
Greece’s upgrade to investment grade status marks a significant milestone in the country’s economic recovery. With continued reforms and growth, Greece is poised to take advantage of its historic window of opportunity and achieve sustainable development for the benefit of all Greeks.
Greece credit rating S&P
Greece Upgraded to Investment Grade by Standard & Poor’s: A Historic Milestone
In a significant development, Standard & Poor’s, a leading credit rating agency, has upgraded Greece’s credit rating to investment grade, assigning a “BBB-” rating with a positive outlook. This upgrade, announced on the evening of Friday, October 20, 2023, marks a historic milestone for Greece, which has been struggling to recover from its debt crisis since 2010 [[1]].
The upgrade has been hailed as a major achievement by the Greek government, with Prime Minister Kyriakos Mitsotakis describing it as an “important milestone” in a post on social media [[3]]. The Minister of National Economy and Finance, Kostis Hatzidakis, also welcomed the development, stating that it is a recognition of the country’s efforts to implement reforms and achieve fiscal consolidation.
The upgrade to investment grade is expected to have a positive impact on Greece’s economy, as it will make it easier for the country to access international markets and attract investment. The Greek government has been working to implement structural reforms and improve its public finances, and the upgrade is seen as a recognition of these efforts.
According to S&P, the upgrade is based on several factors, including the significant fiscal consolidation achieved by the Greek government, which has been supported by a rapid recovery of the economy and the government’s exceeding of its fiscal targets [[2]]. The agency also cited the clean mandate received by the New Democracy party in the elections, which has allowed the government to continue with reforms.
Additionally, S&P noted that Greece’s public debt is expected to continue to decline, reaching 145% of GDP in 2023 and 138% in 2026, compared to 189% of GDP in 2020. The agency also highlighted the favorable debt profile of Greece, with a weighted average duration of central government debt of 17.2 years at the end of June 2023 and relatively low interest payments.
The upgrade to investment grade is significant, as it indicates that Greece has made significant progress in improving its creditworthiness and is now considered a more attractive destination for investors. The move is also expected to have a positive impact on Greece’s borrowing costs, making it cheaper for the government to access international markets.
the upgrade of Greece to investment grade by Standard & Poor’s is a major achievement for the country, recognizing its efforts to implement reforms and improve its public finances. The move is expected to have a positive impact on the economy, making it easier for the country to access international markets and attract investment.
References:
[1] https://www.reuters.com/markets/europe/sp-upgrades-greece-investment-grade-first-time-since-2010-crisis-2023-10-20/
[2] https://tradingeconomics.com/greece/rating
[3] https://www.politico.eu/article/sp-raise-greece-investment-grade-first-time-decade/