2024-09-15 17:36:37
A positive message for the markets is the upgrading of the prospects of the Greek economy by the Moody’s rating agency, the only one of the major agencies that still rates Greece one notch below investment grade.
Although the pending acquisition of the investment grade remains, however, with the upgrade of the outlook from stable to positive, the way is opened for the Greek debt to “climb a step” in the next 12 months. Such a move would close a “circle” as Greece would have regained the investment grade from all the rating agencies, i.e. DBRS, Fitch, S&P and Scope Ratings, which have already classified Greece in the investment grade.
In this case, according to analysts’ estimates, the demand for securities from institutional investors would increase and range from 12 to 20 billion euros from the 7-8 billion euros that is being formed at the moment.
According to the company, the possibility of continuous strengthening of the banking system combined with indications of a further reduction in non-performing loans was a catalyst for the upgrade of the outlook. Additionally, Greece’s faster economic and fiscal strength could move at a faster pace than anticipated.
It is recalled that Moody’s in 2010 had downgraded the Greek debt to the junk category. Since then he has been cautious and sparing with upgrades.
Kostis Hatzidakis: Answer to the nihilistic criticisms
The Minister of National Economy and Finance Kostis Hatzidakis characterizes Moody’s assessment as one more response to those who insist on nihilistic criticism of the government’s economic policy.
“Moody’s proceeded to upgrade the prospects of the Greek economy for three main reasons which, as it notes, are the following: faster growth, better fiscal performance compared to planning which is mainly attributed to the measures to limit tax evasion and further strengthening of the banking system” emphasized Kostis Hatzidakis.
The evaluation cycle until the end of 2024
The new assessment round for the Greek economy was opened on September 6 by DBRS. Moody’s is followed by Standard and Poor’s on October 18. An evaluation that is also expected with particular interest as the largest rating agency ranks Greece in the investment grade (BBB-) while giving positive prospects.
On November 22, the Fitch rating agency will take over, rating the Greek economy BBB- with a stable outlook. The year will close with the evaluation of Scope Ratings on December 6.