S&P upgrades Greece debt rating to BB+

Cites improvement in economy as country deals with fallout of war

WASHINGTON:

S&P Global Ratings on Friday upgraded Greece’s debt rating to BB+, citing its improving economy even as the country deals with the shocks from the war in Ukraine.

“The upgrade reflects our expectation of a continuous improvement in Greece’s policy effectiveness, while the fallout from the war in Ukraine appears manageable in light of considerable buffers in both the private and public sectors,” the agency said in a statement.

The upgrade raised Greece’s rating from BB, while S&P put its outlook for the country at stable, citing “our expectation that Greece’s fiscal buffers and proven policy effectiveness will allow the country to absorb the indirect impact of the war in Ukraine on its economy and public finances.”

Russia’s invasion of its neighbor “is the key driver of our projection that Greek GDP growth will decelerate to 3.4% in 2022 from 8.3% last year” the agency said, “despite low direct export exposure to Russia, significant household savings buffers” and Athens’ moves to purchase natural gas from other countries.

The country is also struggling with high inflation, but S&P said wages has not increased as a result, and price growth would begin to decrease by September.

The agency also noted that fiscal and monetary support from the European Union has boosted Greece’s economy and governance, and predicted the country’s debt-to-GDP ratio would decrease through 2025 as its economy expands and expenditures lessen.

Published in The Express Tribune, April 24^th, 2022.

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