Fitch Affirms Greece at BBB-; Outlook Stable

Fitch Ratings on Friday evening (Athens time) affirmed Greece’s long-term foreign-currency issuer default rating at ‘BBB-‘, with a Stable Outlook.

In an announcement released in Frankfurt, Fitch cited “Greece’s ratings reflect income per capita levels and governance indicators that are well above the ‘BBB’ median, as well as policy credibility supported by EU and eurozone membership. These strengths are set against the legacies of the sovereign debt crisis, which include large stocks of public and external debt, as well as high albeit falling unemployment, low medium-term growth potential and some persistent vulnerabilities in the banking sector.”

Additionally, the international credit ratings agency forecasts “…a continued reduction in the headline general government deficit to 0.8% of GDP in 2025, with primary surpluses averaging 2.3% in 2024-2025 (from 1.9% in 2023). Recent performance has been bolstered by stronger-than-expected revenue intake and expenditure restraint…Fitch sees a strong commitment to fiscal prudence, with the government’s medium-term fiscal plans anchored by conservative revenue assumptions at a time when the authorities are forging ahead with ambitious revenue-raising reforms (including reducing tax evasion among the self-employed and promoting electronic transactions). Successfully raising revenues could create some fiscal space, although the new European fiscal framework places some limits on additional expenditure.”

On the public debt front, Fitch said it “expects the combination of strong fiscal outturns, stable interest costs and moderate nominal growth to continue to drive the public debt/GDP ratio down, to 147.3% in 2025 (from 161.9% in 2023) and under 140% in 2028. This would be a substantial adjustment (the ratio peaked at 207% in 2020) but would still leave debt well above the ‘BBB’ (55%) and eurozone (89.9%) medians. The country’s favourable debt profile—long maturities, no FX debt, and a high share of concessional debt—significantly reduces market risks, while large cash reserves (EUR35 billion in 1Q) serve as a buffer and could be used to reduce debt levels further.”