S&P International Rankings on Friday upgraded Greece’s debt to grade BB with a constructive outlook because it predicted its financial system would rebound over the following two years after the Covid-19 pandemic prompted a contraction in 2020.
The improve from Greece’s earlier BB- grade got here because the scores company predicted the nation would see financial progress of 4.9 % this 12 months and 5.8 % in 2022, after contracting 8.2 % final 12 months amid the pandemic.
“The improve displays our expectation of a fast enchancment in Greece’s financial and budgetary efficiency because the adversarial impacts of the COVID-19 pandemic subside. The federal government’s insurance policies ought to allow progress on budgetary consolidation and structural reform,” S&P mentioned.
Athens can even profit from the Subsequent Era EU restoration fund geared toward serving to nations bounce again from the Covid-19 downturn, which S&P mentioned would “end in an improved financial efficiency.”
The scores company expects the nation to develop sooner than the eurozone common over the following three years, although the hard-hit tourism trade will not return to its stage seen in 2019 till 2024, on the earliest.
The scores company mentioned its constructive outlook means it might improve Greece’s debt in 12 to 18 months if its financial rebound is quicker than projected.
Nonetheless, S&P might revise the outlook to secure if the financial system weakens or for any “giant and adverse deviations from our present budgetary projections.”
S&P had final raised Greece’s score by one notch in October 2019.
Most just lately, scores company Moody’s elevated its score for Greece’s debt to Ba3 final November, after Fitch in July upgraded it to BB.
Greece in 2010 was hit by the most important financial disaster in its up to date historical past, shedding greater than 1 / 4 of its GDP.
The score change applies to Greece’s long-term debt, whereas S&P maintained its score for the nation’s short-term debt at B.