Scope Ratings highlights the positive outlook for Greece’s BBB- credit ratings, emphasizing that primary fiscal surpluses are expected to be maintained in the coming years. They project that Greece’s general government debt-to-GDP ratio will decrease to 150.5% by the end of this year and to 132.8% by 2029, down from a peak of 207% in 2020. If achieved, the 2029 ratio would represent Greece’s lowest debt-to-GDP percentage since the onset of the crisis in 2009 and would fall below Italy’s debt ratio (which has a higher rating of BBB+) by 2027. These projections take into account the anticipated early repayment this year of €7.9 billion in Greek loans due in 2026, 2027, and 2028, according to Dennis Shen of the Sovereign and Public Sector team.

“Our debt forecasts acknowledge the recent fiscal outperformance. We expect the government to meet or slightly exceed its target of a primary surplus of 2.1% of GDP in 2024. We have updated our assumption for the primary fiscal surplus to an average of 2.5% of GDP for the period 2025-2027, throughout the remainder of Prime Minister Kyriakos Mitsotakis’s term.

“Our assumptions consider the recently submitted Medium-Term Fiscal Strategy of Greece to the European Commission. The budget proposes net permanent discretionary expansionary measures of €2.9 billion (or 1.2% of GDP) for next year, following an estimated €1.8 billion (0.8% of GDP) for 2024. The fiscal adjustments primarily focus on the expenditure side, emphasizing public sector wage reforms and pension increases, but they also include a 1 percentage point reduction in social security contributions starting January 2025,” the agency estimates.