Caryatids hold the Erechtheum in Athens on the Acropolis. Source: Harrietta171, CC3/Wikipedia
The Greek economy received a vote of confidence from S&P Global Ratings on Friday, which upgraded its debt rating to BB+.
“The upgrade reflects our expectation of continued improvement in Greece’s political effectiveness while the aftermath of the war in Ukraine looks manageable given sizeable buffers in both the private and public sectors,” the agency said in a statement.
S&P put its outlook on the country at stable, citing “our expectation that Greece’s fiscal buffers and proven political effectiveness will allow the country to absorb the indirect impact of the war in Ukraine on its economy and public finances.”
Greek Prime Minister Kyriakos Mitsotakis welcomed S&P Global Ratings’ decision, saying the upgrade “reaffirms confidence in the Greek economy” after two years of pandemic and in the midst of war.
In a tweet, Mitsotakis added, “We are one step away from the coveted level of investment, a seal of credibility that will improve our country’s investment and development prospects.” We continue with the same seriousness, dedication and hard work to the finish line!”
The upgrade by S&P after two years of pandemic and in the middle of the war confirms confidence in the Greek economy.
— Prime Minister GR (@PrimeministerGR) April 22, 2022
S&P Global Ratings: Growth slowdown in Greece
However, S&P Global Ratings added that Greek economic growth will slow in 2022 due to the war in Ukraine.
“Russia’s invasion of its neighbor is the main reason for our forecast that Greek GDP growth will slow to 3.4 percent in 2022 from 8.3 percent last year,” the agency said, “despite little direct export exposure Russia and significant household savings buffer” and Athens’ efforts to buy natural gas from other countries.
The slowdown in Greek growth was confirmed in early April by the Greek central bank, which lowered its forecast for growth in 2022 to 3.8% from the previous 4.8%.
The agency also noted that fiscal and monetary support from the European Union has boosted Greece’s economy and governance, and predicted that the country’s debt ratio would fall by 2025 as its economy expands and spending slows.
The country is also struggling with high inflation, but S&P said wages have not risen as a result and price growth will slow from September.
Inflation in Greece rose to 8 percent in March, according to preliminary data released in early April by Eurostat, the European Union’s statistical office.
The inflation rate in Greece was 7.2 percent in February compared to 6.2 percent in January.
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