NEW YORK (AP) – Credit ratings company Fitch has raised Greece’s credit rating to one notch below investment grade.
In a report issued on Friday, Fitch estimates that Greece’s deficit will shrink to 1.8 per cent of its gross domestic product (GDP) in 2024 from an estimated 3.8 per cent last year. “There is some uncertainty around fiscal policies after the upcoming legislative elections but the risks are mitigated by a broad commitment to and a recent track record of fiscal prudence,” Fitch said. Greece’s outlook is stable, Fitch said in raising its rating on the country’s debt to BB+ from BB.
Greek banks are another big reason for the upgrade, Fitch said, noting their “important progress in reducing non-performing loans”.
Fitch forecasts Greece’s GDP growth to reach 0.9 per cent in 2023 and 2.3 per cent in 2024.
Inflation is forecast to ease from 9.3 per cent in 2022 to five per cent this year, Fitch said, and only 1.5 per cent in 2024, thanks to the easing of energy and other commodity prices, and other factors.
Greece had once hoped to see its debt upgraded to investment grade by the end of 2022 or early 2023 for the first time since 2010, when the financial crisis caused by excessive deficits and debt hit the country hard, necessitating years of austerity imposed by its creditors.