The Japanese rating agency R&I has upgraded the outlook for the Greek economy from stable to positive (BBB positive), a development considered particularly positive amid current international conditions.

Explaining the upgrade, the agency says the economy is expected to continue growing steadily. Thanks to structural reforms aimed at securing tax revenues, it notes, the primary balance maintains significant surpluses and general government debt has declined further. The fiscal position can also be expected to continue improving, partly because expenditure growth will be limited under the European Union’s fiscal rules. At the same time, financial-sector stability has strengthened, reflecting progress in reducing non-performing loans. R&I also notes that the credit rating will be upgraded if it confirms that efforts to revitalize the economy and achieve fiscal consolidation continue under the new government that emerges after the elections, which, according to the agency, are scheduled to take place in July 2027.

In detail, the agency notes that the economy is growing at a faster rate than the eurozone average, with real GDP increasing by 2.1% in 2025. This is attributed to private consumption supported by higher disposable income, tourism inflows and expanding investment driven by the Recovery and Resilience Facility, as well as Foreign Direct Investment. It says there have been no major changes in the main factors driving growth in 2026 and that, given these circumstances, real GDP growth in 2026 is likely to moderate compared with the previous year, as rising inflation and heightened tensions in the Middle East, among other factors, weigh on the economy. However, R&I expects the country to maintain a strong rate of economic growth, close to 2%. It also believes that the country will maintain economic growth in the 1% range from 2027 onward, while the government is seeking to reduce the economy’s dependence on tourism by focusing on attracting and developing new investment in industry.

The progress made in resolving non-performing loans through a government guarantee scheme, the agency says, has brought the banking sector’s non-performing loan ratio close to the eurozone average. The banking sector has improved its liquidity, thanks to an increase in domestic deposits, while maintaining its equity capital at a stable level. The current-account balance records a deficit of around 6% of GDP, due to a significant trade deficit. However, although the current-account deficit is large, it also reflects an increase in imports resulting from strong investment. R&I does not consider the current-account deficit to be a risk factor in the present circumstances, given that the “twin deficits” that existed in the past have been resolved and part of the current deficit is financed by foreign direct investment. At the same time, the current-account deficit is partly offset by a surplus in the services balance, which is driven primarily by tourism revenues.

With regard to the general government fiscal balance, the agency notes that a surplus has been recorded since 2024 and that the primary surplus exceeds 4% of GDP. The government is collecting more revenue as a result of measures to tackle tax evasion and tax avoidance, including mandatory electronic payments, the digitalization of taxation, the adoption of the digital employment card, and other measures. Indeed, R&I forecasts that the primary surplus will remain firmly positive in the coming years.

Finally, regarding the ratio of general government debt to GDP, the agency notes that it is on a downward trend and forecasts that the ratio will continue to decline and that the country will maintain a sound level of borrowing capacity.