Ratings agency S&P Global Ratings raised Greece’s debt rating on Friday, removing it from the “speculative” category for the first time since 2010 and the debt crisis.
The rating ranges from BB+/B to BBB-/A-3, putting it in the “suitable investments” category rather than the “speculative” category, according to a press release from S&P, the first of the three major global rating agencies. Rating in order to increase the appreciation of the Greek rating.
Prime Minister Kyriakos Mitsotakis, who was re-elected to a new four-year term in June, has made a political bet on Greece’s return to high-quality credit.
Last month, the Conservative leader told Bloomberg TV that returning to investment grade was “an important step for the country after 13 very difficult years.”
The fall in borrowing costs would be “significant” for Greece’s public finances in 2024, he added.
He also promised that Greece would maintain its fiscal discipline and record a primary surplus of 0.7% of GDP this year. S&P, in turn, expects this surplus to exceed that target and rise to 1.2% of GDP.
The prime minister was speaking following the September 8 decision by Canada-based DBRS Morningstar to upgrade Greece’s credit rating to the investment category as early as September 8.
During the economic crisis, Greece suffered a series of downgrades by rating agencies that denied it access to international bond markets.
Greece has endured eight years of austerity as part of three successive international bailouts worth a total of 289 billion euros ($306 billion), implemented in 2010, 2012 and 2015 to prevent the country from falling under the burden of around 300 billion euros of debt collapses.
The economic reforms demanded by Greece’s creditors, the EU and the IMF, had a major impact: the gross domestic product (GDP) fell by a quarter in eight years and the unemployment rate rose to over 27%. The third rescue package ended in August 2018.
According to official data, the Greek economy grew by 5.6% in 2022.
The Greek government’s latest budget forecasts growth of 3.0% in 2024, after forecasting growth of 1.8% in 2023.
The S&P estimate assumes GDP growth of 2.5% in 2023. Net debt is expected to fall from 189% of GDP in 2020 to 146% this year, the agency further welcomes.