Rating agency DBRS Morningstar lifted Greece’s credit rating to investment-grade status to triple B on Friday following recent upgrades of other international agencies.
DBRS said the upgrade reflected its view that, in line with Greece’s “impressive” record, “the Greek authorities will remain committed to fiscal responsibility, ensuring that the public debt ratio stays on a downward trend.” DBRS added that it expected Greece’s primary fiscal balance to reach a surplus of 1.1 percent this year and 2.1 percent in 2024.
The Financial Times (FT) says that although the agency is not one of the “big three,” its ratings are recognized by the European Central Bank, giving its opinions outsize clout within the euro area.
“The return to coveted investment-grade status is the latest sign of Athens’ rehabilitation in the eyes of investors after being pushed to the brink of bankruptcy and exit from the eurozone,” says FT.
“Greece’s upgrade to investment grade is like a seal of approval, firmly putting the crisis years behind us,” said Alex Patelis, the chief economic adviser to Prime Minister Kyriakos Mitsotakis. “There is no room for complacency. We will work hard to live up to and exceed these new expectations.”
“At a time when all our thoughts are with the victims of the unprecedented natural disasters and their families, the recovery of the investment grade for Greece after many years is a very important development for our country,” said Greece’s Finance Minister Kostis Hatzidakis.
Σε μια πολύ δύσκολη συγκυρία για την πατρίδα μας, σε μια στιγμή που η σκέψη όλων μας είναι στα θύματα των άνευ προηγουμένου φυσικών καταστροφών και τις οικογένειές τους, η ανάκτηση της επενδυτικής βαθμίδας για την Ελλάδα μετά από πολλά χρόνια, είναι μια πολύ σημαντική εξέλιξη για…
— Kostis Hatzidakis (@K_Hatzidakis) September 8, 2023
Since its bailout program ended in 2018, Greece has regained bond market access and brought down its debt as a proportion of gross domestic product to 171 percent last year. In the second quarter of 2023, the country recorded the second-fastest GDP growth in the EU.
The news comes as the Greek economy recorded a growth rate of 2.7 percent in the second quarter of 2023 compared to the same period in 2022, according to data compiled by the Hellenic Statistical Authority (ELSTAT) earlier in the week.
In August, Scope Ratings, the leading European provider for credit ratings, raised Greece’s rating to investment grade.
Scope upgraded Greece’s long-term local- and foreign-currency issuer and senior unsecured debt ratings to BBB-, from BB+, and revised associated outlooks to stable from positive.
It revealed that its upgrade reflected a steady trajectory of decline in public debt. This is in conjunction with high inflation, above-potential real economic growth, low average interest costs of the prevailing debt portfolio, and achievement of primary fiscal surpluses.
Greece’s public debt to GDP ratio is expected to fall to 160.7 percent by 2023, a 46 percent decline from the 2020 peak, Scope said.
The move followed the Japanese rating agency Rating and Investment Information (R&I), which also announced it has raised the Greek economy rating to investment grade BBB- with a stable outlook.