Moody’s Highlights Greece’s Rapid Debt Reduction

Moody’s has once again praised Greece for its swift reduction in debt levels, forecasting that this trend will continue into 2026. In its Global Sovereign Outlook 2026, the ratings agency projects that Greek debt will fall by more than four percentage points, a reflection of prudent fiscal management.

The agency notes that most countries projected to cut debt in 2026 have lower credit ratings, with Greece (Baa3) standing out as an exception. Cyprus (A3 – stable) and Ireland are also expected to improve their debt metrics, reflecting a decade of significant reforms, though at a slower pace than in previous years.

Global Challenges Weigh on Fiscal Recovery

Despite stable growth and moderate inflation, Moody’s warns that U.S. policy uncertainty (Aa1 – stable) and geopolitical tensions are limiting fiscal recovery. High debt and rigid fiscal rules constrain policy effectiveness, while political polarization and social unrest force governments to focus on immediate issues, dampening investment, consumption, and consensus-building.

Steady but Slower Global Growth

Moody’s notes that the global economy remains resilient despite high uncertainty, though growth remains below pre-pandemic levels, limiting prospects for a strong fiscal rebound. In 2026, trade tariffs are expected to more visibly affect supply chains and global investment, while modest GDP growth in many countries continues to leave inequalities largely unchanged.

Global Growth Forecasts for 2026

According to Moody’s Global Macro Outlook 2026-27, G20 economies are projected to grow by 2.5% in 2026, in line with the 2025 forecast. In the United States, growth is expected to slow to 2% in 2025 and 1.8% in 2026, down from 2.8% in 2024, due to tariffs and continued policy uncertainty.

Canada (Aaa – stable) and Mexico (Baa2 – negative), affected by U.S. tariff uncertainty, are expected to see a modest recovery from 2025 lows, with growth remaining near 1% in 2026. Chinese growth (A1 – negative) is projected to ease to 4.5%, down from approximately 5% in 2024–2025. In contrast, Sub-Saharan African nations are expected to lead global growth, averaging 4.6% in 2026.

Elsewhere, growth will remain below 3.5%, with the Asia-Pacific region, Central and Eastern Europe (CEE), and the Commonwealth of Independent States (CIS) expanding more slowly than in the pre-pandemic period of 2015–2019.

Source: tovima.com