DBRS Morningstar raised Greece’s credit rating on Friday to ΒB (high), up from BB and changed the trend to Stable from Positive.
According to the German ratings firm, the “upgrades reflect DBRS Morningstar’s view that Greece continues to progress economic reforms and remains fully committed to fiscal consolidation. The economy grew by 8.3% last year and is now very close to its pre-pandemic level. Fiscal overperformance and cash management strategy in 2021 led to liquid cash reserves remaining very high, currently around EUR 41 billion. Russia’s invasion of Ukraine looks set to shave off around one percentage point from this year’s GDP growth.
“The ECB last December signaled its support to Greek government bonds. Greek banks continue to make significant progress in reducing non-performing loans (NPLs) to single digits, even with some new asset quality deterioration. Improvements in DBRS Morningstar’s building blocks of “Economic Structure and Performance”, “Debt and Liquidity” and “Monetary Policy and Financial Stability” are the key factors for the upgrades.”
In an immediate reaction, Greek Finance Minister Christos Staikouras referred to an “extremely positive development” and recognition of the progress and prospects of the (Greek) economy.
Staikouras noted that even amid successive and simultaneous external crises (pandemic, Russian invasion of Ukraine, energy prices), Greece has taken another step forward and has now come within a notch of reaching the investment grade rating.
Fitch upgraded Greece’s credit rating to “BB” on Jan. 15, referring at the time to a strong growth dynamism by the Greek economy and a reduction in the fiscal deficit, both of which will support an accelerated decrease of the public debt.
Conversely, S&P last October declined to publish a report on the Greek economy, with the next review expected in roughly five months.