Fitch Ratings has upgraded Greece’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BBB-‘ from ‘BB+’.
Characterized by Greek finance experts as the strictest and most robust rating agency, Fitch rewards the Greek economy’s effort by giving the country a vote of confidence.
Fitch is the fourth rating house to upgrade the investment in Greek bonds after Scope Ratings in August, DBRS in September, and S&P in October.
Fitch is also the second of the big three US rating agencies after S&P to give Greece a higher investment grade. This will allow more institutional investors to buy Greek bonds, thus increasing capital inflows and further helping to contain borrowing costs for the Greek government and businesses.
The main drivers for the upgrade, according to Fitch’s announcement, are the favorable dynamics of the Greek debt, the commitment to fiscal adjustment, resilient growth, policy continuity, and the improvement of the banking system.
The Fitch Ratings upgrade indicates that Greece’s economy is on an upward path as regards to government policies. It also opens new perspectives for foreign investment.
Greek Finance Minister Welcomes Fitch Upgrading
Greek Minister of Economy and Finance, Kostis Hatzidakis, called the Fitch Ratings upgrade a “national success” and made the following statement:
“The upgrade of the Greek economy by Fitch formalizes Greece’s promotion to a higher investment category from the point of view of credit rating,” he said. “It is a great national success.”
“Fitch is the third—out of the four recognized by the European Central Bank—rating agency to award investment grade status to our country in recent months,” Hatzidakis continued.
This is “a fact that certifies the progress of the Greek economy and the even more positive perspectives that are opening up with the implementation of our economic policy,” he said. “At the same time, it creates the conditions for further strengthening of investment inflow, better financing conditions for the economy, economic growth and increase in employment.”
“I underline the house’s remarks about the record reduction of debt by 65 percentage points of GDP, from 205 percent during the pandemic period to 160.8 percent this year and 141.2 percent of GDP in 2027,” he added. “Also, the remarks about fiscal responsibility policy which, among other things, ensures the necessary resources for permanent and extraordinary social policy measures. [There are] forecasts for strong economic growth and political stability in the coming years. It also indicates progress in the banking sector.”
“Today’s upgrade is an important step that raises our country’s economy even higher, with the continuation of the combination of fiscal responsibility with social sensitivity,” he concluded.